What would you think of not withdrawing your pillar 2 within the framework of the homeownership promotion scheme (EPL) but to pledge it instead?
Little piece of advice, next time you see your banker, bring your pension certificate with you and ask whether he could evaluate this possibility.
Put simply, pledging or collateralisation of your pillar 2 works the same way as withdrawing it but without actually making a withdrawal.
Does this idea sound bizarre? Not really…
Instead of taking out the necessary assets that are kept warm in your pension fund, you will guarantee them that if you do not honor your loan engagements, they can seize your second pillar assets by means of forced withdrawal. It is a win-win situation, the bank can grant you a mortgage loan and, more importantly, you get to not use your pillar 2. Thereby, your covers (retirements, invalidity and death) remain untouched.
What’s the catch?
Just like every solution, it comes with its disadvantages:
One of these disadvantages is the fact that your debt will be bigger (up to 90% of the price of the property), which means your mortgage rates will increase.
Since your debt went from 80% to 90%, the bank will require a greater financial solvency which necessarily requires a higher income.
Pledging? Withdrawing your pillar 2? Each situation has to be evaluated on a case-by-case basis. Here is a short summary of these two options.