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Old 10.09.2019, 12:41
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Property purchase rules 10% cash and 10% pension...?

Hey, so a quick one.. Normally you need to have 10% cash and 10% pension money for the purchase of property.. What if I found something which could be covered easily by the pension money? It would easily make up 20% of the needed funds for example... Is that allowed?
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Old 10.09.2019, 13:01
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Re: Property purchase rules 10% cash and 10% pension...?

i think the rule is min 10% cash. but you can add 20% pension on top if you like
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Old 10.09.2019, 13:31
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Re: Property purchase rules 10% cash and 10% pension...?

Are you sure Phil? I thought they'd limited the amount of pension money you could put towards property purchase to 10%.

https://www.ch.ch/en/financing-homeownership/
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Old 10.09.2019, 13:51
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Re: Property purchase rules 10% cash and 10% pension...?

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Are you sure Phil? I thought they'd limited the amount of pension money you could put towards property purchase to 10%.

https://www.ch.ch/en/financing-homeownership/
Thanks for that link, it's quite clear here:

///
Pension fund savings: if you need a mortgage to fund the purchase, at least 10% of your own capital contribution must come from sources other than your pension fund
///

Thanks!
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Old 10.09.2019, 13:51
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Re: Property purchase rules 10% cash and 10% pension...?

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I thought they'd limited the amount of pension money you could put towards property purchase to 10%.

https://www.ch.ch/en/financing-homeownership/
No, they made it so you have to have at least 10% as your own funds but didn’t limit what percentage the pension contribution could be.
The amount you can take from the pension is limited by how much you have in there, how old you are and the criteria set by the pension fund.
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Old 10.09.2019, 14:06
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Re: Property purchase rules 10% cash and 10% pension...?

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Hey, so a quick one.. Normally you need to have 10% cash and 10% pension money for the purchase of property.. What if I found something which could be covered easily by the pension money? It would easily make up 20% of the needed funds for example... Is that allowed?

No, it's up to your bank to ask for what they want, but as a rule of thumb you need a minimum of 10% in cash, it is far too easy to put down the 20% only in pension money.


And dont forget, you can only spend it once, so when you get to pensionable age, the less you will have


Your age will also play a role in the amount you can use i believe.
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Old 10.09.2019, 15:00
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Re: Property purchase rules 10% cash and 10% pension...?

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No, it's up to your bank to ask for what they want, but as a rule of thumb you need a minimum of 10% in cash, it is far too easy to put down the 20% only in pension money.
It is not fully up to the bank, law has set a minimum of 10% which one has to pay out of ones own cash.
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Old 10.09.2019, 16:05
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Re: Property purchase rules 10% cash and 10% pension...?

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It is not fully up to the bank, law has set a minimum of 10% which one has to pay out of ones own cash.
It’s fully up to the bank if they want your business or not.
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Old 10.09.2019, 16:25
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Re: Property purchase rules 10% cash and 10% pension...?

3p counts as cash.

Tom
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Old 10.09.2019, 17:24
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Re: Property purchase rules 10% cash and 10% pension...?

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It’s fully up to the bank if they want your business or not.
Yes, but they are not free to ask what they want.
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Old 10.09.2019, 19:10
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Re: Property purchase rules 10% cash and 10% pension...?

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Yes, but they are not free to ask what they want.
Depends.

If the value exceeds the price, the percentages drop.

We only put up 30% for an interest only mortgage, for example, rather than the normal 35%,

Tom
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Old 10.09.2019, 19:58
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Re: Property purchase rules 10% cash and 10% pension...?

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Depends.

If the value exceeds the price, the percentages drop.

We only put up 30% for an interest only mortgage, for example, rather than the normal 35%,

Tom
All true, but I am referring to the 10% cash on a mortgage.
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Old 10.09.2019, 20:10
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Re: Property purchase rules 10% cash and 10% pension...?

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All true, but I am referring to the 10% cash on a mortgage.
It's not that you have to put down 10% cash, but rather that you can use the 2p for max 10%, so cash would be 10% only if you need to put down 10% of the purchase price, however the bank does need to require that you put down 20% of the purchase price.

Thus, if they decide that you only need to put down 15%, only 5% needs to be cash.

Tom
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Old 10.09.2019, 20:23
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Re: Property purchase rules 10% cash and 10% pension...?

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It's not that you have to put down 10% cash, but rather that you can use the 2p for max 10%, so cash would be 10% only if you need to put down 10% of the purchase price, however the bank does need to require that you put down 20% of the purchase price.

Thus, if they decide that you only need to put down 15%, only 5% needs to be cash.

Tom
I can't find a source that agrees with you, to my knowledge it always has been like: 10% cash minimum which cannot come from P2, but there is no problem using money out of P3 for this, and 10% (or more if the bank demands such, but 20% total seems to be the minimum mostly.)) can come from whatever and there is no restriction of 10% max from P2

Last edited by EdwinNL; 10.09.2019 at 21:12.
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Old 10.09.2019, 21:32
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Re: Property purchase rules 10% cash and 10% pension...?

OK. So I decided to check the rules again to see if they have changed since the 2014 rule changes:

https://www.finma.ch/en/news/2019/08...stregulierung/

EDIT: need to digest to understand changes.

New rules for investment properties seem to also include the old 2014 rules:

https://www.swissbanking.org/library...r_DE_clean.pdf

Last edited by Phil_MCR; 10.09.2019 at 22:03.
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Old 10.09.2019, 22:39
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Re: Property purchase rules 10% cash and 10% pension...?

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Are you sure Phil? I thought they'd limited the amount of pension money you could put towards property purchase to 10%.

https://www.ch.ch/en/financing-homeownership/
No. You can use as much as you have available for purchase in your pension fund but also need minimum 10% cash.
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Old 11.09.2019, 09:56
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Re: Property purchase rules 10% cash and 10% pension...?

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No, they made it so you have to have at least 10% as your own funds but didn’t limit what percentage the pension contribution could be.
The amount you can take from the pension is limited by how much you have in there, how old you are and the criteria set by the pension fund.
quite, depends on the lendor as well. As a rule in Switzerland aver a certain age they want to see 36% without touching your pension
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