Stage 1: Finance residential real estate and close any gaps
If you dream of owning your own four walls while you’re still young, you need to set yourself a savings goal as early as possible. The maximum price you can pay for a property will depend on your financial situation. With the financing guidelines that currently apply, you need to be sure you can still meet the running costs of the real estate even with a higher interest burden. Today, you need equity of 20 percent to buy or build a home of your own. At least 10 percent of this must be “real” equity, i.e. your own savings, securities, Pillar 3 assets, or the redemption value of insurance policies. Advances on inheritance or loans from relatives are also accepted, provided they do not have to be paid back and no interest is due on them. The remaining 10 percent can come from an advance withdrawal or pledge from your pension fund. The other 80 percent is usually financed via a bank mortgage.
As a future homeowner, you should also think about protecting your family. And if you decide to use money from your pension fund, you need to be aware of the possible impact. Depending on your pension fund’s regulations, you may lose out on benefits. It’s best to ask your pension fund about the benefits you can expect in the event of invalidity or death. Early withdrawals always lead to a gap in retirement pension cover, however. These gaps can be closed later by making voluntary purchases of pension fund benefits. Thanks to compulsory accident insurance, employees are relatively well insured against loss of earnings due to an accident, although they may suffer a significant loss of income if they become unable to work or die following an illness.
To make sure that the family can still afford its home if the main breadwinner is unable to work or dies, you can take out life insurance for a sum equivalent to a second mortgage. The insured sum paid out reduces the debt. You should also check whether benefits from Pillars 1 (AHV) and 2 (pension fund) would be sufficient to meet your financial obligations. If not, you’ll need to make other arrangements.