smzh blue logo

Use of pension assets

2nd pillar and pillar 3a for home financing

In Switzerland, pension assets from the 2nd pillar (pension fund) and pillar 3a (tied pension provision) can be used to finance the purchase, renovation, or amortization of owner-occupied residential property.

It is important to note that these funds may only be used for your primary residence – vacation homes or investment properties are excluded.

Einsatz von Vorsorgegeldern - desktop

An early withdrawal of pension assets can have far-reaching consequences:

Reduction of retirement assets

Withdrawn assets will be missing in your pension fund and pillar 3a, reducing your pension benefits.

Lower benefits in case of disability or death

An early withdrawal reduces not only your old-age pension, but also the benefits in the event of disability or death. This can become a financial burden for the surviving dependents.

Sensible insurance

A private risk insurance can offset reduced retirement benefits and provide comprehensive coverage in the event of death or disability.

Possible uses

Purchase of owner-occupied residential property

  • Pension assets may be used to buy an owner-occupied property that serves as the primary residence.
  • Vacation homes or investment properties cannot be financed using these funds.

Renovation or modification

  • Savings from pillar 3a may be used for renovations that maintain or increase the value of the primary residence.
  • Savings from the 2nd pillar may be used for renovations if they are closely related to the use of the primary residence.

Mortgage amortization

  • Retirement savings may be used for direct mortgage amortization, which reduces the financial burden.
  • They may also be used for an indirect amortization via pillar 3a.

Early withdrawal and pledging of pension capital

Early withdrawal

  • You withdraw pension assets directly for financing.
  • This reduces your overall pension assets, which has implications for your benefits in case of old age, disability, or death.

Pledging pension capital

  • You use your pension capital as a pledge without effectively withdrawing it.
  • This increases your mortgage and leaves your pension assets intact.

Advantages and disadvantages of early withdrawal or pledging

Aspect

  • Pension capital
  • Taxes
  • Protection
  • Purpose of use
  • Financing leeway
  • Repayment

Early withdrawal

  • Reduction of benefits in case of old age, disability, or death
  • Early withdrawal is taxed as income
  • Only permitted to finance one's primary residence
  • Capital is immediately available
  • Repayment obligation in case the property is sold

Pledging

  • No reduction of benefits in case of old age, disability, or death
  • No immediate tax burden
  • No reduction of provision benefits
  • Only permitted to finance one's primary residence
  • Possibility to increase pledge
  • No repayment obligation as no capital is withdrawn

How to proceed

1

Analysis of financial situation

  • Determine whether an early withdrawal or pledging is better in your situation

  • Examine the impact on your retirement provision, disability pension (IV), death benefits

2

Insurance of pension gaps

  • Consider whether to take out a private risk insurance to offset the reduced benefits in case of death or disability

  • Seek advice regarding potential insurance solutions

3

Examination of intended use

  • Make sure that the property you are buying will be used as your primary residence

  • Document the intended use, for instance in a purchase agreement or renovation plans

4

Coordination with pension schemes

  • Request an early withdrawal or pledge from your pension fund or pillar 3a provider

  • Submit all the necessary documents

5

Inclusion in a mortgage strategy

  • Use your pension capital to improve your lending limit or reduce your mortgage

6

Long-term planning

  • Make sure that your retirement provision remains guaranteed through alternative measures such as additional payments or private pension plans

Videos on "Home ownership promotion"

Eigenheimfinanzierung - desktop

Financing your own home

Learn what matters when financing your own home – from choosing the right mortgage to developing a long-term, sustainable financing strategy. Careful planning and regular reviews are essential for your financial success. smzh also provides comprehensive support with tax matters related to marriage, pensions, and assets – to help you achieve focused and holistic financial planning.

(in German)

Baukredit - desktop

Construction loan

Learn how to use a construction loan flexibly for your building project and discover the advantages it offers over a traditional mortgage. With proper planning – from the equity ratio to the utilization of the credit line – you can strategically manage costs and risks. smzh also provides advice on tax matters relating to marriage, retirement, and assets – ensuring a well-thought-out and forward-looking financial plan.

(in German)

Immobilienkauf - desktop

Real estate purchase

Find out what is important when buying and selling real estate in Switzerland. From initial planning and property search to contract execution: receive valuable tips on financing options, contract negotiations, and legal requirements to ensure a secure and successful real estate transaction.

(in German)

Document Library

Eigenheimfinanzierung - desktop

Financing your own home

Be it a property purchase, renovation, or refinancing a mortgage: We offer tailor-made financing solutions that match your circumstances. Discover how to best combine your own funds and a mortgage to get a home that is right for you.

(in German)

Baukredit - desktop

Construction loan

A construction loan enables you to continuously finance your construction project – custom-fit and without immediate amortizations. Ideal for new construction, renovations, or extension buildings: This is how you retain full control over costs and liquidity regardless of what stage your construction project is in.

(in German)

Immobilien kaufen und verkaufen in der Schweiz - desktop

Buying and selling real estate in Switzerland

Whether you are buying or selling – a real estate transaction in Switzerland requires in-depth knowledge, legal clarity, and well-thought-out planning. This fact sheet provides a concise overview of everything you need to know, ensuring a secure and smooth transaction.

(in German)

Office St. Gallen - desktop

smzh for you

Our experts support you in using your pension assets safely and efficiently:

  • Requirement analysis: We assess whether an early withdrawal or a pledge is better suited to your requirements.
  • Advice on pension gaps: We analyze the impact on your disability and survivor benefits and develop solutions such as private risk insurance to offset these gaps.
  • Process management: We assist you with the application and coordinate with your pension institution.
  • Integration into financial planning: We combine the use of your pension assets with an optimal mortgage strategy and ensure your retirement provision is secured in the long term.

News

img - desktop

Assessment of the real estate market

The SNB’s key interest rate cut is stimulating growth in the construction sector – despite a subdued economic outlook. Investment properties remain in demand, with the first signs of declining acquisition yields indicating growing capital pressure. The owner-occupied housing market remains stable with positive price momentum. There is also no end in sight to the upward trend in rents: in 2025, regional increases of up to 4% are possible.

img - desktop

Assessment of the interest rate and mortgage market July 2025

The yield curve has largely normalized following the SNB’s key interest rate cut. While SARON mortgages have reached their low point, fixed-rate mortgages remain attractive across all maturities. However, geopolitical tensions and subdued economic prospects raise questions about future developments.

Monthly updates on real estate and mortgages – subscribe now and identify opportunities early.

smzHub Hypotheken Immobilien

We handle questions such as these and many others on a daily basis. You don't need to deal with them by yourself – our 360° Check-Up is free of charge and non-binding.

Contact us

No, your pension assets may only be used to finance your primary residence.

An early withdrawal reduces your pension capital, which in turn lowers your disability and survivors' benefits. A private risk insurance can help bridge this gap.

Pledging is advisable if you want to maintain your pension benefits while also securing a higher loan-to-value ratio for your financing.

A private risk insurance can help protect you against a reduction in benefits in the event of death or disability. We look forward to advising you on suitable solutions.

Yes, you can, as long as the renovations maintain or increase the value of your primary residence.