Financing with residence abroad

Looking for a bank on the Weinstrasse. Your situation has nothing to do with cross-border commuters either. The bank has - thanks to equity in the form of building land - practically zero risk.

so for the valuation and lending = 0.00 risk

but the bank has to calculate whether the customer can afford the installment. On the Weinstrasse the "cross-border commuters" are allowed but mostly from France, i.e. EUR billing, EU area, so that can be a problem...

but if they have billing in CHF, where they have no legal access to it (in credit agreements there is a silent assignment of wages... therefore they want an employer based in D or EU)

but as I already wrote, it is not impossible...

so for ING you have to live and work in Germany in order for them to provide financing.

Yes, I also called there directly and inquired. The conversation was pretty short, currently financing with them is not possible.

Switzerland is not in the EU, so I assume the salary is currently paid in CHF? Then there is also foreign currency with the banks (so many banks are out because of that!)

It probably also makes no difference that although we still receive everything in CHF when concluding the financing, after moving we are of course paid in EUR and at least I, as the main earner, am also employed by a German employer (subsidiary)? It’s all only afterwards and thus our chances to manage the costs efficiently seem pretty low. We had assumed anyway that we would have to move temporarily during construction, now it is just potentially much earlier. A pity.

and the work should not be worth 40% less, but if you live in Germany then you automatically have to pay taxes in Germany, so much less net remains from the gross than is the case in Switzerland.

I just meant that for our employer she suddenly is worth 40% less, since he pays us 40% less gross. We are also aware that the deductions in Germany are much higher ;) It just feels weird, but I can partly understand the employer. It would be strange if I earned more than the managing director just because I started in Switzerland.

As described, this whole thing would be resolved since after moving we would of course receive EUR and no longer CHF.

currently I might have 1-2 banks that can handle such constellations. But here you should plan at least 2% repayment.

Our current plan is simply to pay as low a rate as possible, put the rest into our already existing portfolio, and after the fixed interest period, depending on the interest rate, simply pay off the remaining debt in full. According to my Excel repayment plans, this is the best way for us to optimize risk/return. The rising interest rates of course make it less comfortable, but for now (let’s see how long) we have enough buffer to manage. We would still have 1-2 years for financing, but we currently expect less that it will "get better".

"Our current plan is simply to pay the lowest possible rate, continue to put the rest into our already existing portfolio, and then, depending on the interest rate level after the fixed interest period, simply pay off the remaining debt in full. According to my Excel repayment plans, this is the best way for us to optimize risk/return. The rising interest rates of course make this more uncomfortable, but for now (let's see for how long) we have enough buffer to manage it. We would also have 1-2 years left for the financing, but currently we rather don’t expect it to get 'better'."

Sure, if you pay 2% interest at the bank and make an average of 5-6% after taxes with ETFs/securities, it of course makes a lot of sense over the long term. If you watch carefully and can liquidate 1-3 years before the end of the fixed interest period if necessary, so you don’t have to sell at the bottom if it falls then.

But there are only very, very few banks (countable on one hand) that still offer less than 2% amortization.

And you should think carefully about it right now.

Either I accept the higher interest rate in a few months with 1% amortization, or maybe a lower interest rate with 2% amortization would be possible now?

There are these "interest rate trend barometers," I find them interesting... What do they say currently?

The tendencies for the next 4 weeks:
Interest rates falling, probability: 0% (1-2 weeks ago this was still a 10% probability)
Interest rates staying the same, probability: 30%
Interest rates rising, probability: 70%

Mid-term, i.e. 6-12 months:
Interest rates falling, probability: 0%
Interest rates staying the same, probability: 10%
Interest rates rising, probability: 90%

Yes okay, maybe my post was a bit misleading. It's not really about the 1% repayment, that was just the hook that at least ING insists that we have to live and work in Germany. I was less interested in discussing how much repayment makes sense, but rather in ideas/exchange of opinions on how we can best manage the transition from Switzerland -> Germany including financing.

The discussion about rising interest rates doesn't help us either, we haven't even planned the house yet and currently don't know when we will need how much loan. We are just trying to identify such problems early and clear them out of the way as best as possible.

Maybe the only answer is to find a bank that has no problem with that, which is of course valid. I hoped that maybe there are other possibilities :)

It was less about discussing how much repayment makes sense, and more about exchanging ideas/opinions on how we can best manage the transition from Switzerland -> Germany including financing.

In this case, you are somewhat limited in choosing the bank anyway. I wouldn’t narrow it down further by opting for an extremely low repayment rate. Take 2% repayment and most banks should be open to you.

The topic of cross-border commuters is not uncommon here in Konstanz. The intermediaries here also know the banks that do not cause any problems with such matters. Because the banks in the border area are of course familiar with the issue.

That is precisely the difference. While the cross-border commuter changes neither workplace nor place of residence, here both are changed. For the cross-border commuter, the problem is the garnishment of salary or the house, since at least a part is always abroad.