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Indirect amortization: Which account?

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Forum Banking Forum Mortgages Indirect amortization: Which account?

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BenutzernameMoneyland User Questions
Status Member
Registriert seit1/27/17
Beiträge2145

February 21, 2017, 3:24:45 PM

Hi all,

What type of account do I use for amortization payments in the case of indirect amortization of a mortgage?

BenutzernameMoneyguru von moneyland.ch
OrtSchweiz
Status Expert
Registriert seit8/4/15
Beiträge4079

February 22, 2017, 10:16:58 AM

Greetings,

When mortgages are amortized using indirect amortization, amortization payments are paid into a tax-privileged 3a retirement account or a 3b retirement account rather than directly to the lender (as is the case with direct amortization).

In addition to 3a retirement accounts, many lenders also provide the option of using a pension securities account or a 3a life insurance policy. Credit Suisse, for example, offers all three options.

Important: A number of lenders only allow indirect amortization using accounts which they provide themselves, and will not allow you to use an account from another bank for amortization.

When you use indirect amortization, you are still required to pay off your second mortgage with regular repayments within a maximum loan term of 15 years.

Best regards from Moneyguru

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