Fixed rate, variable or mixed? - Page 2

drmom · #21 17.10.2011, 17:23

	Quote:	Phil_MCR
	don't forget to knock tax off your interest costs. so if you have 25% tax rate, then you 9k of costs will be only 6.75k of costs post-tax.

We are new here - so I have no clue how any of the tax stuff works (yet) - I am on a need to know basis, and up to know, I don't need to know

Phil_MCR · #22 18.10.2011, 01:57

	Quote:	jaudi
	One comment re: long term fixes. On the surface they are very attractive. Just consider, what is the chance that in the next 10-15 years you may want to either pay off your mortgage (or a substantial part of it) or maybe more likely to sell the property (and hence cease mortgage). Such long term fixed deals could incur significant penalties in these scenarios.

that is a good point. I intend never to sell it, so is a non-issue for me. however, assuming the buyer is willing, in switzerland it is possible to sell property with a mortgage attached. at these low rates and without mortgage costs, this could be attractive for the buyer.

At such low rates a mortgage today is practically free money, so there is also little incentive to repay the mortgage. In fact, there is a tax incentive not to.

In ten years, you might earn more interest in a bank account. Right now, you can get 2% in a pillar 3a and so the cost even in this low rate environment is small.

miniMia · #23 18.10.2011, 03:48

Why not a mixed mortgage? Ours is mixed. I can't remember exactly, but it's something like 60/25/15 at 10/5/6months. We will renegotiate the loan when we get back to CH. So we will pay some penalty on the 60% but I'm guessing it will be worth it. Will see.