Switzerland offers low interest rates for mortgages on property, and while the process is similar to arranging a mortgage in other countries, there are some things to be aware of. Lenders usually require that your monthly income is 3x the amount of your loan repayment.
Mortgages are usually arranged directly through your lender such as a major bank rather than a broker or agent. Typically you can find fixed rate mortgages, variable rate mortgages, offset mortgages, capped rate mortgages and bridging loans. Mortgage rates are generally 4-5%. You will need at least a 20% deposit.
If you’re planning to use your pension as a deposit there are certain terms to be aware of:
- The property must be a primary residence
- It must be owned by you alone or you and your spouse or registered partner
- If you default on your mortgage you will also lose your pension
- You must already have paid into the pension fund and accrued a sum to pledge
- This option is unlikely to be available if you aim to pledge a non-Swiss pension, for example a company pension accrued in your previous country of residence