An honest review of Moneypark

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My wife and I recently took out a mortgage through Moneypark. It was a mixed experience and I thought sharing our experience would be useful to others.

Overall

Moneypark likes to say that they not only help you get the best mortgage by negotiating with their 100 partners, but they also help you optimize your taxes for your personal situation.

In reality it really seems like they only ask 3 banks for offers (as they know they're the most competitive) and the tax advice is a pre-bundled package they give everyone. Moreover, they only engage third parties for the mortgage, not for the 3a pillar, because that's something they offer themselves.

I'm also pretty sure that the mortgage setup they offer you is pretty much the same for everyone:

How Moneypark works

Moneypark is a mortgage broker and a subsidiary of the insurer Helvetia. They are a broker, not a bank, so they don't lend you money directly. Instead, they help you find the best mortgage deal from a range of their financial partners.

That brings me to my first criticism. Our Moneypark consultant was quick to tout the apparent fact that Moneypark works with hundreds of financial partners, painting a picture that they would be able to find the best deal out of hundreds of options.

In the end, however, they contacted 3 banks and got us a single offer. This was disappointing. I've read similar stories from others.

We happened to be in a rush, so getting the single offer was a big deal for us. But not being able to compare offers was a big let down.

Part of the deal is that Moneypark gets a commission from the bank for every mortgage they broker. They also charge you around CHF ~1'000 CHF for their service and make you sign a contract. I thought the charge was probably a good sign. Other mortgage brokers work on a commission basis only, so they only get paid if you take out a mortgage through them.

About the contract (Beratungsmandat)

You can view the contract here.

In retrospect I'm displeased with the contract and would not sign it again were we in the same position. It's a contract which you have to sign before they start working on your case. It's a contract which you can't cancel. It's a contract in which you commit yourself to choosing one of the options provided by them by the time of the last meeting. If you are in breach of the contract, they will charge you CHF 2'500.

Upon sharing the contract with us, our Moneypark advisor asked us what we had understood. I don't remember what I responded with initially, but from their reaction it was clear I hadn't fully understood. They then offered a summary. What it MessageEvent, according to them, was that we could not take one of their offers and then go to the bank directly to get a better deal. That's fair enough.

I think that was slightly misleading. They emphasized the part of not being able to use the Moneypark offer to negotiate other offers. This obscured the fact that we were committing ourselves to taking one of the offers they would provide.

In the end we got the offer from Moneypark at a point where we were still waiting for offers that we had procured ourselves, including from my own bank. We took the last meeting with Moneypark, not realizing that this is stipulated in the contract as the point of no return.

This turned into an awkward situation where our Moneypark advisor was insisting that we had "moral" obligation to take one of the offers he was presenting. Meanwhile we were unaware we had made the contractual commitment to take the offer. Moreover we had no idea how to evaluate the offer without being able to cmopare it with others.

In retrospect I think the Moneypark advisor crossed a line here. We had a contractual obligation to take the offer OR pay the penalty fee — that's it. Invoking morality here is bullshit.

The calculations

Something I liked about Moneypark is that they ran through a calculation of the property value with us. In doing so, they used the "Hedonische Methode", which is a widely used model used for property valuation in Switzerland. After filling in all the property details, they were able to give us an estimate for the property price. It turned out almost exactly the price the seller was asking for.

Also, our Moneypark advisor was kind enough to run the calculation again with some imagined renovations, to see how much we would be able to increase the property value. This gave us a good idea what to expect in terms of property value increase.

Mortgage structuring

Moneypark was also able to give us some advice on what options there are to structure the mortgage. For instance I wasn't aware of the option of collateralizing our second pillar pension fund instead of paying it out. The former has the benefit that you continue to earn interest on the amount, while the latter has the benefit that you can use the money to pay off the mortgage.

One option that I was aware of was indirect amortization, where instead of paying the amortization costs directly, you pay them into a fund which is then used to pay off the mortgage at the end of the term. This has the benefit that you can invest the money into funds which invest in the stock market and potentially earn more than the mortgage interest rate.

Our Moneypark advisor set us up with a 3a account with Helvetia which we could use for indirect amortization and invest in passive funds. This was combined with a life insurance policy (covering disability only). I'm not sure if this was a good deal or not, there was no time to compare other offers. Moreover, not just any 3a account can be used for indirect amortization, our bank (UBS) would have to approve it — and there aren't many they approve of.

The timeline

29.03 I signed up on the Moneypark website

I believe I just entered my email address and phone number.

02.04 The Moneypark advisor calls me and we set up the first meeting

They mention they'll do a calculation of the value of the house and do some calculations with regards to the mortgage. If we feel good about the conversation, they say, we can choose to sign a consulting mandate (Beratungsmandat).

After the call they sent me a list of documents to provide them with before our next meeting:

Personal documents:

Documents pertaining to the property:

05.04 The first meeting

There are two main things that happen in the first meeting with Moneypark.

This first is that, using the information you provide about the property, they run a calculation of its estimated value using the industry standard Hedonische Methode (opens in a new tab).

The second is that they calculate whether you're able to afford a mortgage on the property. There are two main things they look at here. (a) They will check whether you can put forward enough cash so that the loan-to-cash ratio (more commonly referred to as Loan-to-Value ratio or Belehnungswert) is below 80%. (b) They will check whether the monthly payments associated with the loan are below 33% of your gross income (Affordability or Tragbarkeit).

We have the first meeting with Moneypark. They run us through a calculation of the property. The advisor is kind enough to run one calculation before planned renovations and one after. This allowed us to get an idea of how much we could increase the property value.

We ended up purchasing a different property, so I feel comfortable sharing the before and after calculations here so you can get an idea.

After the meeting our advisor sent the Beratungsmandat for us to sign. There were also some more documents to provide, so they weren't able to get started on the mortgage yet.

10.05 Second "first" meeting

In the end we were not able to buy the first property. It was an appartment in a building with 3 other appartments. The building rules stipulated that no pets were allowed. We have a dog, so we couldn't buy it.

By the 10th of May we had found a new property and had another meeting with our advisor, largely identical to the first meeting.

13.05 Finanzierungsbestätigung

On the 13th of May we receive a formal confirmation, signed by Moneypark, that we're able to afford a mortgage on the property and that they feel confident they can find us a mortgage.

We pass this to our real estate agent, who tells us that this didn't mean much to them. The only confirmation that counts, apparently, is one from the bank.

17.05 Bill for the service

On th 17th I receive the bill to pay the CHF 980 for the service.

21.05 Decision meeting

On the 21st of May we had a meeting with our advisor where they were slated to present us the offers they had procured. In the end they were only able to show us one offer.

This meeting included an analysis of what would happen should one of us become disabled. They showed some calculations that show that the other would struggle to pay for the mortgage. This is what they used to argue that we should take out a life insurance policy. The product they pitched is a investment oriented saving insurance from Helvetia.

Initially we were told we would be advised on the topic of tax opitmizations. In the end this didn't seem to go further than suggesting a 3rd pillar pension (which has deductible contributions) and mentioning that we could achieve further deductions by paying more into our 2nd pillar.