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Old 15.03.2021, 07:09
spark spark is offline
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Re: Clarification on Mortgages

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- Assuming getting a mortgage to buy a property for yourself, why should that person pay 1% value of the property as a cost to the bank?!!!!
Uhm, why indeed? He shouldn't. The only cost you pay is interest, quite a bit below 1% today. Amortisation is not cost, it's a repayment of your debt.


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- Reading UBS website, says each property requires max 2 mortgages (13% and 67% +20% down payment). the 13% should be paid within 15 years. Why some people say then another mortgage is required. why?!!!
Historically, the interest-only part of the mortage was called "1. Hypothek", and the part that you're required to linearly amortize within 15 years - "2. Hypothek". In practice today most banks i think don't make the distinction anymore. Usually you would just have one mortgage contract for the whole amount. It will be *very* difficult to split the mortgage between different banks.


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- Let's say I want to have my first property and I have 20% of it ready and I get the mortgage. Then after 6-7 years, I pay off that 13% of the mortgage.

If I want to buy another property, do I have to pay again 20% of the new property
Yes


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or I can use the current property as an equity?
You mean you give the seller 80% mortgage cash from the bank and 20% as part ownership in your existing property? I don't think you'll find many persons interested in such an exotic deal. Most sellers want 100% hard cold cash. Of which at least 20% has to come from you, this is a requirement from FINMA (Mindestanforderungen bei Hypothekarfinanzierungen), not some banks' own made-up rules.

Last edited by spark; 15.03.2021 at 07:23.
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