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Buying an apartment in Switzerland.

Key points at a glance
Do you too have a dream of buying your own apartment in the near future, one that suits your ideas and needs just perfectly? Buying an apartment calls for careful planning, with many factors to be taken into account; important ones include family planning and financing of the property.
Before you buy an apartment to live in, you should know what you are looking for.
Everyone has their own idea of the home they want to live in. Some people’s dream apartment includes a view that cannot be obstructed, while others will insist on an apartment with a garden of its own – preferably with a small seating area for those nice summer evenings. But the size of the apartment or the number of rooms also plays an important role, as do proximity to the workplace and transport connections at the location in question. So before you buy an apartment or start looking for one, you should ask yourself the following questions:

Property type

Do I really want to buy an apartment, or does a house maybe make more sense in my situation?

New-build/Existing property

Would I prefer to buy a new-build, or will an existing property suffice as well?

Size in square metres/Number of rooms

How much space do I or my family need? How big must the apartment be, as a minimum? Are there plans for a bigger family in the foreseeable future? Or conversely, will my children be moving out soon?

Location of the property

Do I want to live in a quiet, rural area or would I prefer the excitement of city life with its wide range of entertainment and shopping options? How important is it to me to have transport links and be close my workplace?

Individual must-haves

What are any non-negotiables for my home? Must the apartment I will live in have a garden, offer a breathtaking view or meet certain architectural preferences? Do I need a specially configured room (e.g. hobby room)?

Financing of the apartment

What are my financial options? Is the price in my range? How much of my own funds are available, what type of financing is on offer and how do I find the cheapest mortgage?

Once you can answer these questions, then you will not only have an accurate idea of your dream apartment, but can also narrow your search and save time. But before you actually buy an apartment to live in, you will probably view several properties. During this process, you are very likely to stray from your original criteria to some extent. This is either because you are struggling to find your dream home with the desired number of rooms and size, or you realise that there are also some properties that do not match your ideals on paper but still have certain merits. 

Buying an apartment in Switzerland with the right financing solution.

If you want to buy an apartment, it is a question of finding the best financing solution. When issuing  mortgages, financial institutions expect two basic criteria to be met: In terms of affordability, the amount involved must not exceed one third of gross household income, and the loan-to-value ratio must not exceed 80% of the purchase price, assuming no additional security is provided. But what is actually meant by affordability and loan-to-value ratio? As regards affordability, ongoing mortgage costs, i.e. interest, repayment and ancillary costs, are expressed as a ratio of gross household income. So it is a case of checking whether the borrower can afford the mortgage over the long term. As for the loan-to-value ratio, this describes the borrower’s own available funds as a ratio of the purchase price for the property. Banks, insurance companies and pension funds only issue mortgages of up to 80% of the value of the property, with at least 20% of the purchase price to be financed through the borrower’s own funds. When buying an apartment to live in, choosing the most suitable form of financing is also very important. The mortgage market essentially offers the following 3 products:

Fixed-rate mortgage

The term and interest rate are fixed in advance and remain the same until the term expires

Terms from two to 20 years with no right to withdraw

High degree of certainty in financial planning

More about fixed-rate mortgages

SARON mortgage

Interest rate is periodically adjusted to the reference rate (SARON)

Minimum term of a few months up to three years

Requires a certain degree of risk tolerance and capital reserves

More about SARON mortgages

Variable-rate mortgage

The most expensive of the three forms of mortgage in the current low-interest climate

No fixed term, only a notice period for ending the mortgage

Used for short-term bridge financing in particular

More about variable-rate mortgages

With fixed-rate mortgages, the financial institution and the borrower agree an interest rate that remains unchanged throughout the term, e.g. 10 years. This protects the person taking out the mortgage against rising interest rates, but they will not benefit if interest rates come down. The advantage with a fixed-rate mortgage is how they facilitate financial planning. By contrast, a SARON mortgage is based on the SARON (Swiss Average Rate Overnight) reference interest rate, which is an interest rate that is updated daily to reflect current market conditions. This transparent link to the market ensures that, in most cases, the interest rate is adjusted in line with financial market trends on a quarterly or semi-annual basis. SARON mortgages are considered to be the most cost-effective form of financing over a long period of time. Borrowers benefit directly from falling interest rates; however, they must also have a certain level of risk tolerance and sufficient capital reserves in order to absorb large fluctuations in interest rates. Variable-rate mortgages, particularly in the current environment of low interest rates, are the most expensive mortgage type and are mainly used for short-term bridge financing as they do not have a fixed term.

MoneyPark. Financing made easy for that dream apartment.

MoneyPark will find the best mortgage for you from the offers available, from over 100 providers, and work with you to define a suitable financing strategy, so that buying an apartment to live in becomes a fond memory. Our experienced advisors will take you through the entire financing process in a transparent and tailored manner, and will be happy to advise you on remortgaging or extending a mortgage. If you too want to find the best mortgage when buying an apartment in Switzerland, we look forward to hearing from you. You can find us across Switzerland at around 30 Helvetia offices.

The current most attractive mortgage interest rates.

Saron mortgage from*

0.65%

Fixed-rate 10 years from

1.37%

Fixed-rate 5 years from

1.03%
* The value shown here for a SARON mortgage is made up of the current SARON (Swiss Average Rate Overnight) and the individual margin of the mortgage lender. Generally speaking, the interest rates shown are the best conditions currently available. Your personal interest rate may differ based on the loan-to-value ratio, affordability, mortgage volume and location of the property.

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