If you are in the market for buying a house in Switzerland, you may need to consider applying for a mortgage. Mortgages cover the costs of purchasing a house by providing the amount required to purchase the property, with the expectation that you will repay the mortgage back over a period of time.
Mortgages in Switzerland are available for those on long-term permits to live in Switzerland, as well as for non-Swiss residents. Mortgages can purchase all types of housing, and mortgage providers will be able to tailor a specific price to the property you wish to buy. Whether you will qualify for a mortgage is based on your finances and savings.
Mortgage requirements in Switzerland
Expats in Switzerland are able to purchase property if they are on long-term residence permits. Non-residents of Switzerland can also apply for mortgages to purchase housing with some restrictions.
This means that any person who fulfils these basic requirements can apply for a mortgage:
- You hold a Swiss B- or C-residence permit
- You are currently working in Switzerland or are claiming your pension.
- You have started a business in Switzerland.
- You are able to afford an immediate payment of at least 20 percent of the cost of the property you wish to buy.
- You are able to afford the taxes, costs & fees involved in buying a house.
- You can afford your utilities, including energy and water.
- Your annual mortgage payments do not exceed 33 percent of your annual net income.
Bear in mind that B-permit holders may only apply for one mortgage at a time, whereas citizens of Switzerland or C-permit holders may apply for as many as desired or permitted by their mortgage provider.
Self-employed applying for a Swiss mortgage
If you are a self-employed person or a freelancer, you are still able to purchase housing in Switzerland. However, in order to secure a mortgage for your dream home, you may have to prove that your income is consistent and sufficient enough to afford the mortgage. Many banks consider freelancers and entrepreneurs to be at a high risk of default, so may have a higher net income threshold or may ask for more evidence of your solvency through your tax return or by proof that you have paid your business taxes.
Retirees applying for a mortgage in Switzerland
If you are retired, there are many banks that will be able to provide mortgages for you. There are some banks that specialise in mortgages for senior citizens and will be able to tailor a deal for your needs. Instead of regular income, your mortgage costs will be covered by your pension. Bear in mind that mortgages offered to seniors may have shorter repayment windows and therefore may be more expensive.
Holiday home mortgages for Switzerland
If you do not live in Switzerland but would like to buy a house, you must fit certain criteria and must only use the property in certain circumstances. In order to purchase property, you must either apply for a visa if you wish to develop property or directly with the mortgage provider if you would like to just own a property. The criteria for mortgage lenders vary, but some general rules are:
- You must have a good reason to purchase property in Switzerland.
- You must have a strong connection to Switzerland.
- You must have the financial capacity to support two homes.
If you have been approved, you are able to use the house as a holiday home for 90 in every 120 days of the year as mandated by your visa or EU citizenship. If you would like to stay in your property for longer, you must go through registration and apply for a residence permit.
Key documents required for getting a Swiss mortgage
In order to apply for a mortgage, you must make sure that you have all the relevant evidence on hand. These include proof that you fulfil the criteria for a mortgage in Switzerland. Some of the evidence and information you must provide are:
- Full ID such as a passport
- Residence permit for Switzerland (if applicable)
- Social security number (AHV)
- Details of any claims for social security, e.g. unemployment benefits or welfare
- Evidence of financial sustainability such as bank statements or tax returns
- Proof of liquidity
- Documents related to the property as provided by a real estate agent
Applying for a mortgage in Switzerland
If you feel that you have passed all the relevant criteria and have provided sufficient evidence, you can now start applying for mortgages. During this time, it is essential to find the right location for where you are going to live. It is not uncommon for mortgages to be researched before looking for a house in Switzerland. Once you have found your new home, you can find out how the mortgage process works with our guide to Swiss mortgages.
