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Old 19.01.2021, 17:54
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Any drawbacks using insurance company non bank for mortgage?

Assuming similar negotiated interest rates are there any tangible advantages to having a mortgage with CS, UBS or kantonal bank, versus some of the new crop of providers which often have very tempting terms on amortization and interest rate.

In other words what’s the catch?
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Old 19.01.2021, 17:57
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Re: Any drawbacks using insurance company non bank for mortgage?

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Assuming similar negotiated interest rates are there any tangible advantages to having a mortgage with CS, UBS or kantonal bank, versus some of the new crop of providers which often have very tempting terms on amortization and interest rate.

In other words what’s the catch?
You could be stuck with them if you have fixes ending at different times. Should they decide to pull out of the market & be uncompetitive. This could happen with any provider.
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Old 19.01.2021, 18:18
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Re: Any drawbacks using insurance company non bank for mortgage?

Yes, that crossed my mind. Of course any bank can and will try to screw you as a tranche renews.

I assumed that if the provider decided to exit the market they cannot just close the mortgage entirely before the fixed term is up ( without paying some sort of compensation).
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Old 19.01.2021, 18:24
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Re: Any drawbacks using insurance company non bank for mortgage?

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Yes, that crossed my mind. Of course any bank can and will try to screw you as a tranche renews.

I assumed that if the provider decided to exit the market they cannot just close the mortgage entirely before the fixed term is up ( without paying some sort of compensation).
They cant do anything, although to change bank you will need to go through affordability checks, could be an issue if you were unemployed at the time.
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Old 19.01.2021, 18:33
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Re: Any drawbacks using insurance company non bank for mortgage?

I looked into this before (and went with a mutual insurer) and one catch was that the insurance companies tend to offer more conservative and more vanilla mortgages, eg fine for your home and if you have a good deposit, less so if you want to finance a buy-to-let from a tiny deposit. But sounds like you have a good offer, look into it. It's likely they ask/get you to sign up for life assurance with them too. And as fatmanfilms already says you're tied to them.


If you just want to keep one financial relationship do take your insurance mortgage offer back to your bank to see if they can match or beat it.
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Old 19.01.2021, 20:55
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Re: Any drawbacks using insurance company non bank for mortgage?

Thanks, these are good watch outs. I do enjoy the negotiation side of Swiss mortgages. Wonder how long it will last...
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Old 20.01.2021, 15:49
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Re: Any drawbacks using insurance company non bank for mortgage?

As mentioned already insurances are more conservative, for example they mostly take average of last 3 years in salary as base for "Tragbarkeitsrechnung", banks will gladly take last salary as long as "growth trend" is visible. Also, some insurances will only finance 75% (banks will do 80%).

Another important thing to consider is that insurances will never "upgrade the mortgage" to finance renovations (Baukredit). So if you purchase house with intent to invest serious money into it and expect that money to come from mortgage then banks are your only options.
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Old 20.01.2021, 16:11
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Re: Any drawbacks using insurance company non bank for mortgage?

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Yes, that crossed my mind. Of course any bank can and will try to screw you as a tranche renews.
In my experience this isn't the case - the terms offered for my renewal were discounted from their listed rates by more than the discount I got for the original contract.

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I assumed that if the provider decided to exit the market they cannot just close the mortgage entirely before the fixed term is up ( without paying some sort of compensation).
They would probably sell the existing loans to another provider.
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Old 20.01.2021, 16:17
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Re: Any drawbacks using insurance company non bank for mortgage?

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Assuming similar negotiated interest rates are there any tangible advantages to having a mortgage with CS, UBS or kantonal bank, versus some of the new crop of providers which often have very tempting terms on amortization and interest rate.

In other words what’s the catch?
There's no catch. I went with an insurance company. I understand that are actually more competitive than banks for regulatory reasons.

https://www.snb.ch/en/mmr/reference/..._buffer.en.pdf

Last edited by Phil_MCR; 20.01.2021 at 16:28.
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Old 21.01.2021, 10:01
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Re: Any drawbacks using insurance company non bank for mortgage?

I had few offers back in time from insurances
- there were very competitive and better than bank offers

however all had in common

- conditions of the service was way less than what bank provided
- insurance was somewhere between the lines of the offering

and overall it would have been 0.3% cheaper to go with Insurance - conditions of "extraordinary termination" were not negotiable and given way too much leverage to the provider - I choose to do old-fashion pay more & sleep well.

Here is pretty good summary of reasons I didn't go with insurance mortgage :

[German]

14. Kündigung von Krediten. []
- der Kreditnehmer mit Zahlungen gegenüber Dritten in Verzug ist;
- die Vermögens- oder Ertragslage des Kreditnehmers nach Einschätzung und Ermessen der Kreditgeberin
wesentlich geändert hat
- die bestellten Sicherheiten nach geschäftsüblichen Beurteilungsgrundsätzen keine genügende Deckung mehr
aufweisen (der Entscheid, ob bestellte Sicherheiten noch eine genügende Deckung aufweisen, steht im alleinigen Ermessen der Kreditgeberin).


https://romann.org/files/romann/pdf/kreditvergabe.pdf

when compared against Bank conditions where there is one liner :

- should I be behind on payment for 60-day they have right to extraordinary termination - that's it.

Last edited by hoover1; 21.01.2021 at 10:14.
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Old 21.01.2021, 12:19
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Re: Any drawbacks using insurance company non bank for mortgage?

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I had few offers back in time from insurances
- there were very competitive and better than bank offers

however all had in common

- conditions of the service was way less than what bank provided
- insurance was somewhere between the lines of the offering

and overall it would have been 0.3% cheaper to go with Insurance - conditions of "extraordinary termination" were not negotiable and given way too much leverage to the provider - I choose to do old-fashion pay more & sleep well.

Here is pretty good summary of reasons I didn't go with insurance mortgage :

[German]

14. Kündigung von Krediten. []
- der Kreditnehmer mit Zahlungen gegenüber Dritten in Verzug ist;
- die Vermögens- oder Ertragslage des Kreditnehmers nach Einschätzung und Ermessen der Kreditgeberin
wesentlich geändert hat
- die bestellten Sicherheiten nach geschäftsüblichen Beurteilungsgrundsätzen keine genügende Deckung mehr
aufweisen (der Entscheid, ob bestellte Sicherheiten noch eine genügende Deckung aufweisen, steht im alleinigen Ermessen der Kreditgeberin).


https://romann.org/files/romann/pdf/kreditvergabe.pdf

when compared against Bank conditions where there is one liner :

- should I be behind on payment for 60-day they have right to extraordinary termination - that's it.
this varies between institutions. hard to say that there is a trend without more data. i've seen bank mortgages with more conditions and insurance mortgages without the 3rd party default clauses.
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  #12  
Old 21.01.2021, 20:33
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Re: Any drawbacks using insurance company non bank for mortgage?

that very well my be today Phil_MCR.
I only can advise -> Read small print ... don't sign anything as Swiss law is very open and once you sign - you responsible for all the T&Cs of the contract - no excuses.

just out of curiosity I looked up one ...

https://www.swisslife.ch/content/dam...arlehen_de.pdf

would never sign such T&C ...

Last edited by hoover1; 21.01.2021 at 20:44.
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