A central question that one has to ask oneself in a Pension planning or also at the Purchase of a home often asks; is my affordability (ratio of imputed costs to income) still given with retirement? Even when you reach retirement age, lenders still calculate with an imputed interest rate for the Mortgage of 5% and 1% for the ancillary costs. This means that with a house worth CHF 1 million and a mortgage of CHF 660,000, the imputed burden is CHF 43,000. In other words, you would need an income of CHF 129,000 (1/3 rule) to keep your affordability in the green zone. However, some banks are more accommodating after retirement and accept an affordability that is slightly higher than 33%.
When buying a home, this topic is usually still somewhat in the background, depending on the age, but should nevertheless be examined and taken into account in the mortgage model and the amortisation plan. We often forget that the low interest rates we have enjoyed in recent years will not last forever and that more than 2.5% is possible, that inflation can sometimes be higher and that political circumstances can have a major impact on our everyday lives or that an additional liquidity reserve would be advantageous. Those who in the past few years have Mortgage and has to renew today would now pay three times as much in 2023 as it did 3 years ago, depending on the timing.
What is also often neglected is the fact that the pension no longer corresponds to the last income, but the expenses hardly become less after retirement. In order to avoid having to amortise a large amount shortly before retirement, it is advisable to plan early, taking into account financial possibilities and personal needs.
How your financial planner can help you with this?
Your Financial planner is able to draw your attention to various aspects, including the acquisition of real estate, in the sense of holistic planning. They will show you possible challenges based on your personal circumstances and can suggest possible solutions. During the process and the consultation FINBERG already outlines the situation in old age or in the event of certain events when you buy a property and supports you with the Replacing your current mortgage.