The Swiss mortgage market is constantly evolving. Thanks to the falling rates, citizens are numerous to buy flat, house or land. Nevertheless, getting the funding for his future property is sometimes the war of the nerves. How to find the best mortgage deal? Which solution to acquire the 20% of deposit required? We will try to answer some of your questions in several points.
The importance of the deposit
The real estate financing in Switzerland is relatively demanding. Indeed, the crisis of the 90’s has lead to Swiss banking establishments to increase the guarantees that are required towards their clients. In general, these lasts are lending up at 80% of the selling price. The remaining amount and the acquisition costs are covered by the deposit, usually 20% minimum. These one can come from:
- Savings accounts
- Provident fund: 2nd and 3th pillar
- Life insurance
- bank account
How to choose the best deal?
The real estate market in Switzerland is very vast and competitive. There are thousands of mortgage offers who could possibly tempt the buyer. Nevertheless, before getting engaged it is important to compare the different offers that are available on the market. Indeed, a difference of mortgage cost can on the duration save you thousands of francs.
The Swiss mortgage
The mortgage who belongs to everyone doesn’t exist. An optimal solution is taking under account the financial margin, the capacity and the risk of the borrowers, etc… In Switzerland it exists three kinds of mortgage the:
- Fixed: Swiss people like security. That’s why four borrowers under five conclude to a fixed mortgage rate. The duration of the interest is determined at the conclusion of the contract. The duration going from one to ten years are current. The medium duration from four to six years are more frequent. The fixed mortgage suits the borrowers who don’t like bad surprises and order they can establish a clear budget.
- Variable: the share of the variable mortgage had progressed by the years. This one was due to the interest rate-the variable mortgage is adapted to the capital market which makes them very attractive in time of decrease. Usually, there are concluded without fixed duration, for a cancellation period of 6 months.
- Libor: the interest is oriented on the rate of the references of euro. The Libor (for <>). The providers are adding a margin who depends on the creditworthiness of the customers. The monetary mortgage is concluded with a determined duration, his interest is adapted periodically.
Good to know
- The real market in Switzerland can be complex for a new buyers. In order to find the mortgage solution that suits your needs and your budget, being aided by a specialist can be a good idea. Thanks to our partner CreditLoan you would be able to contact mortgage broker for free who will be glad to compare for you the different offers on the Swiss market.
