What is indirect amortization?
When repaying your mortgage, you have two options: direct or indirect amortization.
If you opt for indirect amortization, the repayment amount is not paid into the account of the lending institution but into a third pillar, which may be a bank account or an insurance product.
What are the advantages and disadvantages of indirect amortization?
With indirect amortization, the amount of debt and mortgage interest remains unchanged. Thus, the amount of mortgage interest remains stable and significant and can be deducted from taxes.
In addition, the amount of the third pillar payment is also tax deductible up to the maximum allowed per year. The amount saved must be paid to the lending institution by the agreed due date at the latest and is subject to a separate, specific tax.
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