Early withdrawal or pledge: which is better?

With an early withdrawal, the pension fund money flows into the purchase, your pension shrinks and the withdrawal is taxed immediately. With a pledge, the assets stay in the fund, but the mortgage is larger and you pay more interest. Pledging protects your retirement savings but needs enough income for the higher load.

Does pillar 3a count as hard equity?

Yes. Pillar 3a assets count as hard equity, like bank balances and securities, in contrast to the pension fund (second pillar). For owner-occupied homes you may withdraw pillar 3a assets early or pledge them.

What about gifts and advances on inheritance?

Gifted or advance-inherited money counts as hard equity as soon as it is yours. Banks want the origin documented, and a loan from your parents only counts as equity if it is interest-free and subordinated for the long term.

Huusfink Guide6 August 2026

Equity for buying a home: the 20 %, the hard 10 % and your pension fund

No 20 % equity, no mortgage. But where the 20 % may come from is regulated, and in this the pension fund is both more powerful and more delicate than many think.

The basic rule: 20 % of the purchase price

Banks finance at most 80 % of the purchase price, or of the bank's valuation if that is lower. The rest you bring as equity. On a purchase price of one million that is at least CHF 200'000, plus the purchase costs, which you pay from savings on top.

The hard half: 10 % without the pension fund

At least 10 % of the purchase price must come from funds that are not from the second pillar. Hard capital includes: bank balances, securities, pillar 3a, gifts and advances on inheritance. The rule comes from the SBVg minimum requirements and applies at every bank.

What the pension fund may contribute

→Only for an owner-occupied home at your main residence, not for holiday homes or investment properties.
→An early withdrawal is at least CHF 20'000 and possible every five years.
→From age 50 the amount is capped (the vested benefits at age 50, or half of the current balance).
→The withdrawal is taxed immediately, reduces your later pension and must be repaid if you sell.

Run both options through

How much pension fund your purchase can take, and what more equity changes about affordability, is quickest to see in the affordability calculator and the maximum purchase price calculator. The choice between early withdrawal and pledge is best discussed early with your fund and your tax office: the answer depends on your tax rate, gaps in your retirement provision and your need for security.

Frequently asked questions

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