The Swiss mortgage
The advertised rate is the last thing to look at. Own funds and affordability decide whether the file passes.
Does your file pass?
The two rules that decide, applied to your figures. This is the calculation the bank runs before it even looks at the rate.
The file passes
- Own fundsCHF 200'000 / CHF 170'000
- Theoretical costsCHF 46'556 / CHF 50'000 — 31.0 % of gross income
The calculation in detail
- Notional interest (5 %)
- CHF 32'500
- Amortisation
- CHF 5'556
- Upkeep and charges (1 %)
- CHF 8'500
- Annual costs
- CHF 46'556
- Maximum allowed
- CHF 50'000
Maximum price financeable
CHF 891'000
with these own funds and this income
The 5 % notional rate is not the rate you will pay: the bank uses it to check you could still cope if rates rose. This rule, not today’s rate, is what blocks most files.
The 20 % own funds rule
You must bring at least 20 % of the purchase price. At least half of that must come from free savings — account, securities, pillar 3a, a gift. The other half may come from the second pillar, by withdrawal or pledge.
Careful with a second-pillar withdrawal: it reduces your retirement benefits and triggers immediate taxation, at a reduced but real rate.
The one-third of income rule
Theoretical costs must not exceed a third of gross household income. Those costs are computed with a notional interest rate — often 5 % — well above the real one, plus amortisation and 1 % of the purchase price for upkeep.
It is this rule, not today’s rate, that blocks most files. It explains why a couple who would comfortably pay the mortgage at the real rate is refused financing.
Fixed rate or SARON
A fixed rate locks the instalment for a chosen term: you know what you pay, and you pay for that certainty. SARON follows the money market: historically cheaper on average, but it rises when rates rise, and you have to be able to absorb that.
Many files mix the two across several tranches, so the whole debt does not fall due for renewal in the same year.
The costs people forget
- Property transfer taxes, which vary by canton.
- Notary and land registry fees.
- Setting up the mortgage note.
- The bank’s file handling charges.
What drives the price
- The amount of own funds and where they come from.
- Household income and how durable it is.
- The type of property and its location.
- Term and rate type.
- The planned amortisation.
We show no tariffs on this page. Unlike LAMal premiums, no public register publishes prices for this branch: they depend on your profile and are calculated case by case. Quoting a figure here would be an invention.