Mortgages
Rates compared across 150+ providers. Affordability answered first.
BCS works alongside providers that can compare mortgage rates with more than 150 providers, guaranteeing you get the best package and interest rates.
General principle
How Swiss finance is put together.
When applying for a mortgage in Switzerland you need to pay a 20% deposit on the purchase price, and the financial institution will finance the remaining 80%.
Your 20% deposit can generally be split in two
- At least 10% of the equity capital must come from liquid assets. These may include cash savings or a securities portfolio, for example. You can also make use of savings from pension Pillar 3a.
- The remaining 10% can come from assets in your employee pension — the 2nd pillar, BVG.
The mortgage is split into a first and a second mortgage
- The first mortgage covers 65–66% of the market value — ordinarily the purchase price.
- The second mortgage is then the remainder minus your 20% deposit, if you need this portion as finance.
- There is an obligation to repay this mortgage within 15 years, or before age 65 — whichever comes earlier.
- The banks accept an insurance Pillar 3 connected to equities as a substitute, allowing for better wealth creation and reduced cashflow.
20%
Deposit required
10% liquid, 10% Pillar 2
66%
First mortgage
Of the market value
15 yrs
To repay the second
Or before age 65
Planning
Before you apply: can you carry it?
Before applying for finance at any financial institution, it is also necessary to check whether you will be able to afford the property. Specifically, the living costs — mortgage interest, property maintenance and capital repayment — must not amount to more than one third of your gross income.
To calculate affordability, financial institutions use an interest rate of 5%, the average value of historical interest. This ensures you will also be able to fund your mortgage in the event of rising interest rates in the future.
If you have rented until now, you will be aware of the ancillary costs of living, such as heating, water and janitorial services. As an owner you will also bear the costs of insuring and maintaining the property. You should budget an annual cost of approximately 1% of the purchase price or market value, and these costs are also included in the affordability calculation.
Affordability calculator
Can you afford the property?
The same test a Swiss lender applies: interest imputed at 5%, the second mortgage amortised over 15 years, maintenance at 1% of the price — all held to one third of your gross income.
At least 10% of the price must come from liquid assets; the balance may come from your Pillar 2.
Gross annual income required
CHF 178,017
Total calculated costs of CHF 59,333 per annum must be no more than a third of gross income.
Indicative only, and not a lending decision or an offer of finance. Lenders differ in how they treat pension assets, amortisation and ancillary costs. BCS compares your case across more than 150 providers before anything is submitted.
Worked example
How affordability is tested, on a CHF 1,000,000 property.
Step one · price and capital
| Purchase price100% | CHF 1,000,000 |
|---|---|
| Own capital20% | CHF 200,000 |
Step two · the two mortgages
The bank divides your mortgage in two. The first mortgage is 66% of the purchase price and does not need to be repaid as long as you can afford the interest. The second portion is the value that remains after deduction of your own capital — here CHF 800,000 − CHF 660,000.
| First mortgage66% | CHF 660,000 |
|---|---|
| Second mortgage14% | CHF 140,000 |
Step three · the annual cost
| Purchase price | CHF 1,000,000 |
|---|---|
| Mortgage | CHF 800,000 |
| Interest rate of 5%Applied for the affordability calculation only | CHF 40,000 |
| Amortisation, 2nd mortgageCHF 140,000 over 15 years | CHF 9,333 |
| Maintenance costs, 1% | CHF 10,000 |
| Total calculated costs per annum | CHF 59,333 |
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Get the package, not just the rate.
BCS works alongside providers that compare more than 150 lenders — so the interest rate, the amortisation structure and the treatment of your pension assets are all optimised together.