Financing

30.03.2020

For remodelling, renovation and refurbishment there are various options for financing. Often it's a mixture of them. Discuss these with your bank.

Financing with pension assets

In principle, you can withdraw pension funds every five years to finance renovations or the remodelling of your primary residence. In the final five years before your regular retirement age, it's possible to liquidate the assets in your Pillar 3a private pension plan at any time. In the case of a withdrawal, however, paid-out amounts are taxed but generally at a reduced rate.

As an alternative, you can take out a pledge against retirement funds. Although this means a higher mortgage rate, it does offer the possibility for further optimisation of your tax situation. Look into your personal situation with your bank advisor.

Increasing a mortgage amount

The tax authorities make a distinction between investments which maintain value and those which increase value. In the latter case, the investments increase the value of the property and thereby improve the bank's loan-to-value ratio so that an existing mortgage can be increased without any problem.

For investments which maintain value, the market value remains unchanged. Therefore, when increasing a mortgage, banks set a lending limit calculated at 80 per cent of the property's market value.

Minergie mortgage

The prerequisite for a Minergie mortgage is a certification of the home according to the Minergie standard (see www.minergie.ch). With a Minergie mortgage you can, depending on the financing partner, profit from longer financing terms, a longer term for paying off the debt (amortisation) and an imputed lower affordability calculation.

Subsidies for sustainable renovations

In the event you renovate in an energy-efficient manner, make some effort to obtain subsidies made available by the federal government, cantons, cities and other communities as well as from regional electricity and gas companies. You can get an overview at www.energiefranken.ch.

Financing