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Old 23.09.2009, 12:21
CH_Me CH_Me is offline
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Re: Repayment mortgage

The banks normally have 2 mortgages - one at around 66% of the value that you pay interest only, and another mortgage for the remainder that you need to repay, depending on the banks rules, by something like your 60th birthday. By making indirect repayments through a bank pledged 3rd pillar you essentially end up with the same loan balance each year.

The benefits to never repaying your loan are reduced asset taxes. A low mortgage interest rate also means you can invest your money elsewhere where you get a better return. For example, I get twice the amount of interest on a term deposit in pounds than I pay on my mortgage here and I pay almost 5x the amount of interest on my UK mortgage than my Swiss mortgage.
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