Many lenders require that a mortgage at retirement age should amount to no more than two thirds of the loan-to-value ratio (estimated value of the property).
This is intended to help ensure that a mortgage remains affordable in old age.
However, the usual rules for calculating affordability also apply to people of retirement age: the imputed housing costs may not exceed 35% of income.
The imputed housing costs are made up of:

• 5% imputed interest on the loan value
• 1% for maintenance based on the market value of the property
• 1% of the loan value for amortization

At retirement age, the 1% for amortization is normally waived because the mortgage must be continuously reduced to 65% of the loan-to-value ratio by the time you reach retirement age.

The pitfall of mortgage affordability in old age

Income in old age is made up of AHV and pension fund pension.
In most cases, pension income is significantly lower than earned income.
However, the imputed housing costs remain almost the same and this leads to a poorer ratio between income and housing costs.
Many lenders then soberly state that affordability in old age is no longer given.
In such cases, the lender of your mortgage demands additional and sometimes high amortization contributions.
If there is not enough capital for the additional amortization, you may have to sell your home.
This situation must be avoided at all costs.

Carefree living with HYPOTEQ

HYPOTEQ offers a special mortgage for people of retirement age with an innovative loan financer.
This means you don’t have to worry about your mortgage after retirement.
This solution also ensures that your effective housing costs actually fall.
The extension of your mortgage is guaranteed.

The interest costs incurred during the term of the contract (e.g. 10 years) are integrated into a fixed-rate mortgage.
This means that the mortgage is increased by the interest costs incurred and paid into a blocked bank account.
The interest is then paid quarterly from this blocked bank account.
This impressive solution also has the positive effect that you no longer have to pay interest and your monthly budget is sustainably relieved.
The affordability rules are also applied with this solution.
However, with the positive difference that the affordability is calculated using the effectively agreed interest rate (e.g. 2.5%) and not the imputed interest rate of 5%.

Your advantages at a glance

• The interest incurred is integrated into the fixed-rate mortgage
• No amortization
• Your monthly pension income is relieved
• You do not have to sell your home

Our promiseWe are your reliable financing partner and ensure that you can enjoy your retirement in your own four walls.

Contact us today by telephone on 044 564 73 70 or via our contact form.
Our mortgage specialists will give you neutral and comprehensive advice.