Amortization – 3rd pilar

Most often, we separate rates by taking half for a period of 5 years and another for 10 years. Thus it can cushion some of the mortgage without penalty. You can actually take out money from your pension fund or your 3rd pillar every five years.

Beware, there is some confusion between the redemption of years in the LPP pension fund (missing years) and the redemption of the LPP for the amortization of the mortgage (we will continue this in future episodes). Depending on your taxable income, you can write off any interest in an indirect way. We generally prefer a couple that take a 3rd insurance pillar and the other a 3rd banking pillar in order to amortize every five years with the bank. The advantage of insurance is based mainly on compound interest and guaranteed return of surpluses, as well as the duration of the contract. The tax treatment of depreciation every 5 years, can be extremely interesting, depending on the marginal tax rate.

Ideally, there should not remain more than 65% credit at retirement. The direct or indirect amortization of 1% per year, lowers the credit owed.

Example credit max. 80%, although today the banks no longer engage in a single row of mortgage, some offer a rate smoothing between the 1st and 2nd row, they dissect the credit in two to study the risk namely at 65% 1st rang and 2nd rang at 15%. Most amortize the 2nd rang in at least 60 years or 65 years, according to the institution. By absorbing 1% per year, you amortize the 2nd rang in about 19 years, and the bank meets itsobjectives. If you have more cash available, you can offset a portion of your debt or invest in REITs that we have established with our partners, a few years ago. You receive a fixed interest of 6% per year. It is a mix of property developments and rentals. This allows our investors, who do not want to manage tenants, to invest in this area. The yield is higher, since with the 6% that you receive once a year, you can pay your mortgage interest, or your depreciation. Moreover, capital is available anytime for depreciation, if you encounter some temporary difficulties.

  • Capital necessary
  • Real estate acquisition
  • The mortgage loan
  • Depreciation / 3rd pillar
  • Construction
  • Condominium (PPE)
  • The Land Registry
  • Real estate guarantee
  • The legal mortgages
  • Taxation
  • Useof pension funds
  • Realisation of a credit
  • Purchase from plans
  • Consequences of Divorce
  • Death and Real Estate
  • General contractor or architect
  • Real estate promotion
  • Cancel a loan for a lower rate