Swiss Property Finance
New Property Finance
Buying a home in Switzerland starts with two questions every lender asks: how much of your own money you can put in, and whether you can afford the loan over the long term.
Own funds: lenders normally require at least 20% of the purchase price from your own funds. At least 10% of the price must come from sources other than your 2nd pillar pension, such as savings or securities. The remainder can come from an early withdrawal or a pledge of 2nd pillar assets.
Amortisation: the part of the mortgage above two thirds of the property’s lending value must normally be repaid within 15 years, and by retirement age at the latest. Repayment can be direct, or indirect through a pledged Pillar 3a account.
Affordability and mortgage options
To test affordability, lenders use a notional interest rate, typically around 5%, plus around 1% of the property value for maintenance and running costs, and the required amortisation. These costs should generally not exceed one third of your gross household income. The notional rate is usually well above current market rates.
You can choose a fixed-rate mortgage, a SARON mortgage that follows the Swiss Average Rate Overnight, or a combination of both. Each carries different costs and risks over the term of the loan.
We start with why you are buying, whether as a home or an investment, and how the purchase fits your wider financial plan. We then compare offers from the lenders we work with and explain the costs, risks and trade-offs of each option before you decide.
Lenders set their own criteria and these change over time, so the figures above are a general guide only.