Mortgage products
Location: Switzerland.
Type of Loan: Repayment or interest-only for purchase or remortgage.
Purchaser: Swiss and foreign borrowers domiciled in Switzerland. Non-resident
foreigners can also purchase property, subject to federal law.
Minimum loan: 350,000CHF.
Minimum loan: None, but must not exceed 80% of mortgage valuation
or purchase price (whichever is lower).
Term: 5 to 30 years up to age 70.
Currency: Swiss Francs.
Rate of interest: See rate guide.
Fees: Swiss bank fees vary but you should expect to pay around CHF500.
The cost of the mortgage valuation depends on the size and location
of the property. You should also allow for notary fees of up to 5%
of the purchase price.
Lending criteria
There are two main criteria for determining how much you can borrow:
the value of the property and your financial situation.
Most Swiss lenders take into account your existing liabilities, including
mortgage/rent payments, personal and bank loans, and maintenance payments.
When these are added to your proposed Swiss mortgage payments, the
total must not exceed 30% of your gross income (33% of net income).
These percentages can vary.
Proof of income is required in all cases. This can be made up of earned
income, pension, investment, or rental income. However, not all lenders
take all of these into account when determining how much you can borrow.
Insurance
Buildings insurance is compulsory but not all lenders demand that
you take out life cover. Savills Private Finance (SPF) can provide
independent advice for all your insurance needs.
Valuation
Loans are available up to 80% of the mortgage valuation. Swiss banks
will lend only on the basis of this valuation.
Legal issues
There are various tax implications from a UK and Swiss perspective,
which you need to consider before buying property in Switzerland.
There are also local registration requirements depending on the amount
of time you spend at your Swiss property each year.
Remember: don’t sign anything until you have taken legal advice
and don’t put down a deposit before checking that it is refundable.
You should also check what legal costs and government taxes you must
pay before committing yourself to a purchase or remortgage.
SPF endeavours to secure the loan on your Swiss property within your
preferred timescale but delays may occur owing to the Swiss legal
and banking system.
Completion
In order to complete the purchase you must be present along with the
notary, vendor, lawyers and the lender’s representative. A power
of attorney may be used to sign the deeds on your behalf.
Applying for a mortgage
It is advisable to arrange a mortgage in principle before committing
to a purchase. This will enable you to find out how much you can borrow
so you don’t waste time looking at properties beyond your budget.
Even if you haven’t found a property that you wish to buy, our
international division can establish your affordability and issue
an approval in principle based on your current financial situation.
If you have already found a property, we will send you a full mortgage
application pack via email or in the post. If the property is still
under construction, we can keep your file open until you tell us it
is ready.
Should you require funds to put towards a deposit, or if you don’t
qualify for a Swiss mortgage, we may be able to help raise finance
for your proposed property.
Contact SPF on 020 7877 4710 or email international@spf.co.uk
CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT
OF YOUR DEBT
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SAVILLS PLC - INTERNATIONAL DEPARTMENT
SPF is part of the Savills Group, the international property consultancy formed in 1855. The Savills plc International team is
based in London and is dedicated to providing a service to meet an individual's overseas property needs.
For more information about Savills plc - International click here.
