What is a mortgage in Switzerland?

Complete guide to understand how mortgages work in Switzerland: principles, conditions, and key steps to finance your real estate.

What is a mortgage?

A mortgage is a bank loan intended to finance the purchase of real estate. The property itself serves as collateral to the bank: in case of non-repayment, the bank can seize and sell the property to recover its money.

Criteria for Obtaining

  • Stable Income

    • Fixed Employment or Established Independent Activity
    • Regular and Sufficient Income

  • Healthy Financial Situation

    • Absence of Legal Proceedings
    • Good Budget Management
    • Professional Stability

  • Sufficient Equity

    • Minimum 20% of the Purchase Price
    • Including a Maximum of 10% from the 2nd Pillar
    • Personal Savings or Donation

Assessment of your financial capacity

  • 1

    Assessment of your financial capacity

    • Calculation of available equity (minimum 20% of the purchase price)
      • Estimation of your repayment capacity
      • Analysis of your monthly income and expenses
      • Verification that housing expenses do not exceed 33% of income
  • 2

    Choice of mortgage type

    • Fixed-rate mortgage: guaranteed rate for a defined period
      • SARON mortgage: variable rate based on the money market
      • Variable-rate mortgage: rate that evolves according to market conditions
      • Mixed mortgage: combination of different types
  • 3

    Financing structure

    • First rank: up to 65% of the property value
      • Second rank: from 65% to 80% of the property value
      • Equity: minimum 20% including 10% in cash
  • 4

    Property evaluation

    • Estimation of the property value
      • Verification of the property condition
      • Analysis of the location
      • Study of the market price
  • 5

    Amortization

    • Direct amortization: regular repayment of the loan
      • Indirect amortization: savings via the 3rd pillar
      • Obligation to amortize the 2nd rank within a maximum of 15 years
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Documents required for file analysis

  • Last 3 payslips

    • Proof of regular income
    • Possible bonuses and 13th salary
    • Other additional income

  • Tax return

    • Last complete tax return
    • Tax assessment certificate
    • Wealth justifications

  • Proof of equity

    • Bank account statements
    • Deposit certificates
    • Donation confirmation (if applicable)
    • Property sale contract (if applicable)

  • LPP Certificate (2nd pillar)

    • Available withdrawal amount
    • Free passage benefits

  • Proof of 3rd pillar assets

    • 3a account statements
    • Life insurance policies
    • Provision certificates

  • Property-related documents

    • Land registry extract
    • Property plans
    • Recent photos
    • Detailed description

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