While most aspects of arranging a mortgage in Switzerland are similar to other countries, there are certain unusual features of the process you should be aware of. For example, in Switzerland people may use certain pension funds to act as security for a mortgage and often take out two mortgages on the same property. If you are buying a house in Switzerland, however, you might consider the low interest rates Switzerland offers.
How much can I borrow?
Swiss banks usually lend up to 80 percent of the current market value of the property, which means that you have to pay a deposit of 20 percent. At least 10 percent must be put down in cash while the other 10 percent (or more) can be arranged using your pension fund – although, if you have not been in Switzerland for long, you might not have much money in such a fund.
Buying property in Switzerland
Growth in urban populations over the last 50 years has increased pressure on limited housing stock. Rising house prices and the tight property market mean that desirable residences are both expensive and hard to find.
Renting in Switzerland
On the other hand, the rental market can be hyper-competitive with landlords receiving dozens of tenancy applications for each property, influencing many people to prefer to own their own home. However, as property prices are high in Switzerland it’s worth fully considering your options before launching into the process.
As a foreigner, so you can buy property if:
- you are an EU or EFTA national with a Swiss residence permit who resides in Switzerland; or
- you hold a Swiss C Permit.
In both cases, you will have the same rights as a Swiss citizen to purchase property, so you can buy business premises, investment properties or a holiday home, in addition to a primary residence. If you hold a Swiss B Permit, you may also purchase a property, but only to live in.
We’ve put together a comprehensive buying guide along with information on taxation, education, healthcare and more.
Mortgage rates in Switzerland, which have historically been between 4 and 5 percent, dropped to historic lows – approximately 1 percent for Libor mortgages – following the lowering of the base Euribor rate. These rates look set to remain as the Swiss National Bank wants to keep the exchange rate as stable as possible.
Foreigners can get a Swiss mortgage – whether they are from the European Union (EU), European Free Trade Association (EFTA; Iceland, Liechtenstein, Norway and Switzerland) or third-national countries (non-EU/EFTA citizens) – provided they have the appropriate Swiss residence permit.
We can put you in touch with a qualified broker in your area.
Repayment periods for Swiss mortgages can be unusually long, with between 50 to 100 years not uncommon.
Lenders in Switzerland will typically require that your monthly income is at least three times the amount required to repay the loan. Unusually, Swiss banks will often include maintenance or insurance charges in this calculation, so the income requirement may be higher than elsewhere for a loan of the same value. Your mortgage and maintenance expenses should usually not account for more than a third of your household’s gross annual income. Use our calculator below to work out how much you can borrow.