The "Pillar 3" private retirement savings plan is doubly valuable in that it can also be used to purchase a home. You have two options for using the savings you've accumulated: you can prematurely withdraw assets to make up the shortfall on your mortgage. Or you can pledge the assets in return for a larger mortgage.

Early withdrawal or pledge of 3rd pillar savings?

Early withdrawal of your "Pillar 3" assets
The savings accumulated in your "Pillar 3a" account may be withdrawn early to pay for your primary residence. You are permitted to withdraw funds every five years. They are taxable.

Pledging your "Pillar 3" assets
Your UBS Fisca account may be used as collateral to finance a larger mortgage. You can pledge assets from your account to mortgage more than the standard 80% of the purchase price of your property. The advantage to you is that these assets continue to work for you, tax-free. They can be invested in the UBS Fisca account with its attractive interest rate, or in the UBS Fisca custody account with interesting UBS Vitainvest securities investments.

The Promotion of Home Ownership Act makes it possible to use the assets of your "Pillar 2" public pension fund (BVG) account to finance your home purchase. There are two ways of doing so: by withdrawing funds early from the vested-benefit capital in your account; or by pledging the capital. You can find out how much vested-benefit capital is available in your account by contacting your pension fund.

Early withdrawal or pledge of 2nd pillar savings?

Early withdrawal of your "Pillar 2" assets
In this variation you tap into your available vested-benefit capital to pay a part of the purchase price of your home. The money withdrawn from your account is taxable. To take advantage of this method you must be able to make up the resultant pension provision shortfall through private retirement savings. The tax on the withdrawal is calculated independently of your normal income and cannot be paid out from the sum withdrawn, which means that a separat sum of money must be in your possession to settle the tax owed. Depending on municipality, canton, and amount withdrawn, the tax can constitute up to 10% of the early withdrawal. The early withdrawal is subject to a restriction on the right of disposal, which means that you are not at liberty to sell or lease your new property until the sum advanced to you has been paid back to the pension fund. With this method you are advised to plan ahead: depending on which company your pension plan is with, the time necessary to effect the early withdrawal can be months.

Pledging your "Pillar 2" assets
In this variation your vested-benefit capital remains intact in your pension fund account, and you use it as mortgage collateral. The advantage to you is that you preserve the full benefits of your occupational pension plan and are able to enjoy its preferential rate of interest.