In Switzerland, banks apply fairly uniform prudential rules. Knowing them lets you work out, before any viewing, what you can reasonably buy.
Own funds: 20% minimum
As a general rule, you need to contribute at least 20% of the purchase price. At least half of this contribution (10% of the price) must come from “hard” own funds: savings, gift, inheritance or withdrawal from the 3rd pillar. The balance may come from the 2nd pillar (pension assets), with its consequences for retirement and taxes on withdrawal.
The theoretical burden: 33% of gross income
The bank calculates whether the home remains affordable over the long term, using a theoretical interest rate higher than the actual rate (generally 5%), amortisation and maintenance costs. These costs should not, in principle, exceed one third of the household’s gross income.
Amortisation
Debt above 65% of the property’s value (the “first rank”) must generally be amortised over about 15 years, or until retirement if that is closer. This amortisation weighs on the monthly payment.
Costs to plan for on top of the price
Notary, land register and transfer taxes are added to the price, depending on the canton. Also plan a reserve for works and maintenance.
Test your situation with our financing simulator, then get a compared mortgage offer via sos-financement.ch.
Usual rules, which vary between institutions. The simulator is indicative and does not replace a bank’s offer.