Mortgage tips and risks
The parents of a close friend of mine are retired. They want to help her buy a flat. They are willing to give 300'000. So far they have been looking for something cheap around 600'000. But with this money you get a flat outside Zurich, nothing nice.
I was thinking if, with the current low interest rates, it would be wise to buy a flat for 1'000'000 and take a fixed mortgage for 15 years. I do not want to advise her something risky. But I thought that having a mortgage, you can use the tax deductions and benefit from the low fixed rate. If, in 15 years, extending the mortgage would become too expensive, you would be able to pay it off, even with an average salary.
Could you let me know your opinion on this? Are there any caveats to consider? One problem I am aware of is the Tragbarkeit. The bank will not give out a loan based just on her income. The question is, can she take the mortgage together with her parents? Regarding background, they are Swiss, and they are typical risk averse people, meaning their savings are sitting on the Sparkonto.