The Swiss mortgage process in 10 steps

The Swiss mortgage process in 10 steps

When you buy a house in Switzerland, getting a mortgage is often a fundamental first step on your way to owning your own home. This process may seem complex, particularly with the costs and incentives involved. This 10-step guide will show you the process involved and what must be considered before making Switzerland your permanent home.

Step 1: Are you eligible for a mortgage in Switzerland?

Switzerland has a stringent set of rules around getting a mortgage. This extends to special criteria for non-Swiss buyers and people on residence permits for Switzerland. The basic requirements for a Swiss mortgage must be fulfilled to start looking for houses.

Step 2: See what you can afford

If you have fulfilled the basic requirements for a Swiss mortgage, it is important to see what type of housing you will be able to afford. Mortgages in Switzerland are predominantly controlled by banks. However, some mortgage brokers are available and will be able to provide a more tailored package for your needs. Buying a house is sometimes less expensive than renting a house or apartment, but it is important to know whether it is the best choice for your budget.

Some of the things you must consider when seeing if you can afford a mortgage are:

  • Will I be able to afford the mortgage fees and costs?
  • Can I afford the cost of home insurance, which is mandatory in some form in all but four cantons?
  • How will the taxes, fees, and costs of buying a house affect what I can buy?
  • Is my income from work enough to support regular mortgage payments?
  • Do I have enough savings to fund the down payment on a mortgage?

Step 3: Getting approved

Once you believe that you fulfill all the requirements, the next step is to see whether you will be approved for a mortgage. There are many different types of mortgages in Switzerland, with many having flexible rates and additional requirements. Once you have decided on your provider and type of mortgage, you will be able to explore options around financing your move to a dream home.

Step 4: Finding your new home

Once you have been provisionally approved, it is time to start looking at your options for buying a house. Choosing the right location is vital and considering the proximity to schools and public transport is a smart move. If you are looking to raise a family, you might have to think about how close your location is to hospitals and childcare. Once you have found the home and location that is right for you, you can consult your real estate agent who will put down your reservation deposit (often a set amount of around 500 to 2.000 Swiss francs) and start the process of purchasing the property.

Step 5: Submit your Swiss mortgage application

Once you have found a home that is in the right location and within your budget, you can go ahead and apply for your mortgage with your provider. After processing, in most Swiss banks, you will receive an invitation to speak with a financial manager in the nearest Swiss city. There, they will take you through the opportunities and risks involved when buying a new property and suggest ways of reducing the costs by tailoring a package specifically to you.

Once you have explored all of your options and have been fully approved for a mortgage, you can begin the process of buying the property.

Step 6: Signing a purchase contract in Switzerland

In Switzerland, all contracts that involve purchasing land or property must be cosigned by a notary. If your local county (canton) operates a system of private notaries, you are able to choose your notary freely. In most cantons, you must use the official notary of your local council (Gemeinde). Typically, notaries can be found in your local tax office or commercial registry office.

How much do notaries cost in Switzerland?

In general, notaries are paid for jointly by the seller and buyer as part of the purchase contract. The amount that notaries charge does vary from canton to canton, however, an average estimate is around 0,1 percent of the value of the property being purchased.

Step 7: Buy your new home

Once you have signed the purchase contract, either you, your real estate agent, or notary must notify the mortgage provider of the full contact details of the seller. They will then pay the seller the appropriate amount for the property and will notify you when the sale is complete. Once this is done, you are almost ready to move into your new home.

Step 8: Pay Swiss housing taxes

Some cantons have property transfer tax, property gains tax, and nominal property tax. These are taxes that the seller and buyer must pay as the transfer is completed. You can find more details on property taxes on our guide to taxes, costs & fees on buying a house in Switzerland.

Step 9: Set up utilities

Once you begin to move into your new home, you will have to make sure that all your utilities are set up for your arrival. This is either done by the seller during the purchase or by the buyer when they move in. When you arrive, it is important that you have registered water, energy, and Internet for the property to avoid denial of service and any unnecessary costs.

Step 10: Move-in

Once you have completed all the steps, you are ready to move into your new Swiss home. Enjoy!

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