Mortgages

For those looking to purchase a home, there is usually no way around a mortgage. In Switzerland potential buyers must finance at least 20 % of the purchase price themselves. The remaining 80 % can financed with a mortgage - a loan with the property as security.

There are differences types of mortgages available in Switzerland. These differentiate through the diverse repayment models and the differing mortgage interest rates offered by numerous banks. A mortgage comparison and intensive advice from a mortgage specialist are essential for people looking to take out a mortgage.

What is a mortgage?

A mortgage is only paid out by the lender if the property can be used as security. The lender is hereby granted the right to utilise the collateral in the event of default. In other words, the property can be sold and the proceeds used to cover outstanding payments should the borrower default on payment.

Who grants mortgage loans?

• Credit Institutions
• Building Societies
• Life insurance companies

First mortgage

With a standard mortgage, 65% of the purchase price is financed with the first mortgage. The first mortgage does not necessarily have to be repaid.

Second Mortgage

The other 15% of the purchase price is financed through a second mortgage. The second mortgage has to be repaid within 15 years, often with higher interest rates.

Tax advantages of a mortgage

• Interest on debt can be set against you tax burden
• Maintenance costs for a property can also be set against tax

Types of mortgage

Various mortgage models are available in Switzerland. Follow the links listed below for further information.
The most popular type of mortgage in Switzerland is the fixed rate mortgage. Approximately 75% of all mortgages in Switzerland are of the fixed rate variety.