Reaching retirement age often marks a sharp drop in income. A reality that can cause problems for owners. The risk: that mortgage charges exceed one third of the new income and that bank requirements are no longer met. Some people find themselves forced to sell their property.
In Vernier, in the canton of Geneva, Maryline bought a house more than 20 years ago. In 3 years, however, she will be retired and her bank has already warned her: her file will have to be re-examined. If it is no longer deemed solvent, it will have to repay part of its debt or simply sell.
A difficult situation with a retirement that promises to be rather meager and part of the second piller already invested when buying the house. “There is no empathy, no effort. I’m a good client. I’ve always paid my bills on time, without any arrears. But it’s ‘do it yourself, that’s how it is, period’. It’s hard, because it’s a lot of memories. But I’m getting used to it little by little. I accept the idea that I have to change and I take it as a new start, “says her in La Matinale.
To try to find a solution, Maryline turned to another establishment but she received the same answer. His income will be too low. Many people who reach retirement see their standard of living drop. A single person under the age of 65 has an average of 6,500 francs per month. When she retires, she will receive 1,800 francs less.
Rather flexible banks?
Most of the banks and insurance companies contacted claim to be flexible. They say they tolerate these changes in situation, as long as the bills are paid. It is only if the interest is not paid that the sale of the property or another solution is considered. This is the policy displayed, for example, by Axa, Raiffeisen or the Banque cantonale vaudoise.
For its part, when the income is no longer sufficient, Allianz says to seek “a solution with the customer”, such as adapting the duration of the credit or the amortization. The insurer declares that it only resorts to selling in very exceptional cases.
A rather rare obligation to sell
According to real estate professionals, being forced to sell your home in retirement remains a rare phenomenon. The organization Pro Senectute also holds the same speech.
However, the proportion of owners decreases at retirement age in relation to the active population. For professionals in the sector, it is a question of anticipating, even from the age of 50.
“A person who has no questions about his retirement and who has not taken the time to read his pension fund statement may indeed have surprises. A bank will always try to find solutions for a person who reaches retirement age, on the other hand it is true that the bank’s discourse will be more cautious. It will make the customer aware that, depending on his financial situation, he may ask for an amount at more important in terms of amortization”, explains Livio Campagna, partner of the Plus group, specializing in real estate financing.
To make arrangements, you must therefore be clear about your future income, but also increase the amortization defined with your bank, in order to pay less interest once you retire. An owner can also have his property reassessed. If a house has increased in value since purchase, the bank will revise its calculations.
Clea Favre
