While using a mortgage to finance a house, the bank accept to finance a part of the total real estate cost. The
mortgage debt is simply the sum “given” by the bank.
This is the repayment of the mortgage debt.
In Switzerland, not necessarily, but highly recommended, as you will continue to pay interest for your mortgage debt.
Interest is calculated annually deptending of the interest rate of your mortgage and the amount of your debt.
Thus, the monthy cost is COST = RATE X DEBT / 12. For example, a 400,000 Chf mortgage with a 2% interest
rate will represent a monthly charge of 400,000 X (2/100) / 12 = 667 Chf monthly.
Yes. Also, a fixed-rate contract will guarantee you a fixed rate over the term of the contract.
Yes. Also, that means you’ll stop the mortgage with your current bank to choose another one.
Direct amortization consists of reimbursing your banl at regular intervals. This will reduce directly your
Indirect amortization consists of establishing a life insurance as a 3rd pillar. Rather than paying off Your
mortgage, you put the money on this life insurance, which can serve you at retirement to repay all or part of your
mortgage at once.
Generally, owners prefer the indirect one. Indeed, even if the indirect amortization does not directly lower
your mortgage debt, and therefore the interest you have to pay, this solution offers interesting tax
Yes. This is, indeed, why indirect amortization is interesting.
Article written by MultiCredit: MultiCredit