Pensions and home ownership

Pillar 2 or 3

Use your private or occupational pension capital to finance home ownership.

Early withdrawal or pledge

Withdraw private retirement capital and pension fund money early for financing purposes or pledge it to the bank to secure the mortgage loan.

Direct or indirect amortization

The right mortgage strategy includes the right method of amortization: directly to reduce the mortgage debt annually or indirectly with the annual 3a deposit.

How can I finance a residential property with 3a funds?

The state counts owning a home as a retirement asset. This means you can use assets from pillar 3a to finance your own home even before you reach OASI retirement age – but only if you move into the apartment or house yourself.

You have two options when it comes to financing:

You pledge your retirement capital as collateral for your mortgage.
You withdraw your retirement capital and thereby increase your equity for the purchase of a residential property.

We would be happy to show you in detail how your financing plan could look.

How can I finance a residential property with pillar 2?

You can also use your occupational pension fund money to buy owner-occupied residential property or repay a mortgage. There are two ways you can do this:

You pledge your retirement capital as collateral for your mortgage.
You withdraw your retirement capital and thereby increase your equity for the purchase of a residential property.

We would be happy to show you in detail how your financing plan could look.

What are the advantages and disadvantages of the two types of financing?

Comparison between advance withdrawal and pledging of pillar 3 assets

Pillar 3 private retirement savings	Pillar 3 private retirement savings	Advance withdrawal	Advance withdrawal	Pledge	Pledge
Pillar 3 private retirement savings	Advantages	Advance withdrawal	Lower mortgage Lower interest burden	Pledge	Additional tax savings Capital remains in pillar 3a and earns interest/increases in value
Pillar 3 private retirement savings	Disadvantages	Advance withdrawal	No additional tax savings Less liquidity due to tax payment	Pledge	Higher mortgage Higher interest burden

Comparison between advance withdrawal and pledging of pension fund assets

Pillar 2 pension fund	Pillar 2 pension fund	Advance withdrawal	Advance withdrawal	Pledge	Pledge
Pillar 2 pension fund	Advantages	Advance withdrawal	Lower mortgage Lower interest burden	Pledge	Additional tax savings Continued full entitlement to pillar 2 insurance benefits Preferential interest rate on financing above 80%
Pillar 2 pension fund	Disadvantages	Advance withdrawal	No additional tax savings Less liquidity due to tax payment A pension gap is created	Pledge	Higher mortgage Higher interest burden

Direct and indirect amortization – what is the difference?

Direct amortization

With direct amortization, you reduce the mortgage amount annually by the amount agreed in the loan agreement. This reduces your debt and the annual mortgage interest to be paid.

Advantage:

Decreasing mortgage debt and interest charges

Disadvantage:

No additional tax savings

Indirect amortization

With indirect amortization, the mortgage amount does not change. You pay the amortization amount into your 3a account annually and thus reduce your mortgage at once after 15 years at the latest.

Advantages: