Mortgages in Switzerland: true or false
Think you know everything there is to know about mortgage loans in Switzerland? Here is a short true/false questionnaire to test your knowledge.
A mortgage is a real estate loan guaranteed by a property: true or false?
Answer: true
A mortgage is a real estate loan guaranteed by a property. This means that the property purchased serves as the guarantee for the loan. If the loan is not repaid, the bank can seize the property to recover the loan.
You must be a Swiss national in order to get a mortgage in Switzerland: true or false?
Answer: false, but…
You need a minimum of a B residence permit to buy a primary residence and a C residence permit to buy a second home or an investment property. Certain municipalities with high numbers of tourists, Valais for example, are exceptions. Cross-border commuters who hold a G residence permit should apply for a B permit, because they are domiciled in Switzerland.
Swiss banks can reject a mortgage application if the debt ratio is too high: true or false?
Answer: true
Swiss banks can reject a mortgage application if the theoretical debt-to-income ratio is too high. This ratio measures the proportion of income used to cover the costs of the loan (interest and repayment). If this ratio is too high (more than 33%), this indicates that the borrower already has a significant level of debt, which may make it difficult for them to repay a new loan.
The most important sign of a good mortgage loan is the interest rate: true or false?
Answer: false
Choosing the right overall mortgage strategy (type of personal funds, loan structure, loan amount, type of amortisation, tax, etc.) often allows you to save more money than getting the best rate.
