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View Poll Results: Do it?
Do it, over long term your return will be surely higher than the mortgage rate. 3 15.79%
Don't do it. By principle never invest borrowed money. 16 84.21%
Voters: 19. You may not vote on this poll

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  #21  
Old 03.12.2018, 15:47
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Re: Riase mortgage and invest

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...Well, actually worst case scenario I could afford to loose it. Should the property prices drop and the bank make a margin call, I could easily reduce my mortgage back to 65% using my 2nd pillar (untouched till now) alone without having to touch my investments at unfavourable stock market conditions.
Forgive the naiive post , but how does one use a second pillar on a bank margin call? I know you can pledge it to buy a property, but to pay off a debt that's come due?
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  #22  
Old 03.12.2018, 16:39
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Re: Riase mortgage and invest

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Forgive the naiive post , but how does one use a second pillar on a bank margin call? I know you can pledge it to buy a property, but to pay off a debt that's come due?
You can amortise property with 2nd pillar.
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  #23  
Old 03.12.2018, 16:42
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Re: Raise mortgage and invest

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Biggest issue is the cash call on the mortgage will happen at a time when equities are down 50%. I don't gear anything, then very little can go wrong as you won't be a forced seller.
Wait. I thought there is a minimum interest rate for 2nd pillar balances and it was never negative. So how can your 2nd pillar balance go down?

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Swiss property could easily fall 50%, just knocking off the ZIRP premium from the last 10 years. I remember when post finance paid 2.5% interest & it's not so long ago.
Now we are on the topic of "should I buy a property in CH at today's prices" and no longer about "increase mortgage to invest".

I wonder if I had a poll on the former, would the majority of the votes be "don't buy any property in CH now, prices are way to overvalued and a margin call is a huge risk"?
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  #24  
Old 03.12.2018, 18:33
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Re: Raise mortgage and invest

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Wait. I thought there is a minimum interest rate for 2nd pillar balances and it was never negative. So how can your 2nd pillar balance go down?
Probably when it's not in a company scheme, mine certainly did. Does the guarantee apply to the whole balance or just the legally mandated part?
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  #25  
Old 04.12.2018, 08:54
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Re: Raise mortgage and invest

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Probably when it's not in a company scheme, mine certainly did. Does the guarantee apply to the whole balance or just the legally mandated part?
It surely does on the mandatory part (by law). I am not sure about the extra-mandatory part. But I checked the reports back to 2008 and for my company (CH big pharma) the balances never dropped.
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  #26  
Old 04.12.2018, 09:03
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Re: Raise mortgage and invest

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It surely does on the mandatory part (by law). I am not sure about the extra-mandatory part. But I checked the reports back to 2008 and for my company (CH big pharma) the balances never dropped.
That explains the appalling performance of Swiss pension funds.
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  #27  
Old 04.12.2018, 20:57
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Re: Raise mortgage and invest

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It surely does on the mandatory part (by law). I am not sure about the extra-mandatory part. But I checked the reports back to 2008 and for my company (CH big pharma) the balances never dropped.
You're talking about your personal sheet you receive at the start of each new year?
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  #28  
Old 05.12.2018, 00:04
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Re: Raise mortgage and invest

The problem is, when there is such a big crash on the stock-market, nothing will be as it was. There would be side-effects, amplification-effects even.

Every country is leveraged to the tilt.

There's no repeat of the 2008 game of quantitative easing.

Well, OK, they could try. But nobody would feel to well about it.
No amount of make-up could cover the sweat-pearls politicians would be showing on announcing that.
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