Switzerland Mortgage Guide Fact Sheet and FAQ – Frequently Asked Questions

This fact sheet summarises Swiss mortgages for non-residents and HNW buyers, with links to the full Switzerland mortgage guide where you want more depth on eligibility, restrictions, process, tax and risks. For current rates and market context, see our European property finance news & commentary page.

• Fact Sheet Overview
• Key Facts (Eligibility, Types, Process, Features)
• Key Numbers (LTV, Rates, Deposit, DTI, etc.)
• Key Costs & Taxes (Purchase & Annual)
• Equity Release & Refinancing
• Key Considerations (Docs, Insurance, Risks, Structures)
• Illustrative Example Scenario
• FAQ Overview

FAQ quick links: Eligibility | How much can I borrow (LTV)? | What interest rate will I pay? | Foreign buyer restrictions (Lex Koller) | Notary & purchase fees | Renting out | Tax benefits | Capital gains tax on sale | Early repayment penalties | How long does it take? | Currency risk

Fact Sheet: Swiss Mortgages for Non-Residents (HNWIs)

If you want the longer, fully detailed version of mortgages in Switzerland (with examples and deeper explanations), read the Swiss mortgage guide.

Key Facts:

Eligibility:

• Foreign nationals can purchase property, subject to strict regulations (Lex Koller & Lex Weber). Read more in the Switzerland mortgage guide.
• Typically limited to holiday homes in designated tourist areas; restrictions apply for non-residents.
• Mortgages are available, but banks typically require significant financial assets, strong income and a conservative affordability profile.

Mortgage Types:

• Fixed-Rate Mortgages: Most common; stable repayments for the agreed term.
• Variable-Rate Mortgages: Flexible, typically tied to SARON (Swiss reference rate) plus margin.
• SARON-based Mortgages (formerly LIBOR-linked): Variable interest based on market reference rates.
• Interest-Only Mortgages: Common for high-net-worth clients, often alongside pledged asset collateral and/or private banking arrangements.

More detail on Swiss mortgages and product types (fixed vs SARON, structuring and renewals) is in the full guide.

Mortgage Process Timeline:

• Initial consultation and pre-approval (~1-2 weeks).
• Property search and reservation contract.
• Formal mortgage application and property appraisal (3-4 weeks).
• Mortgage approval & signing of deeds at notary (~6-8 weeks total).

For the full purchase/mortgage journey, see the step-by-step Swiss mortgage process.

Mortgage Features:

• Typical mortgage terms: 5-15 years fixed, renewable.
• Common practice: Amortise to ~65% LTV; higher effective leverage possible with pledged assets (case-by-case).
• CHF-denominated mortgages are standard; multi-currency lending is possible but uncommon.

Key Numbers:

For context on the latest market direction, see rates news & commentary and the guide’s Interest Rates & Financing Costs section.

Key Costs & Taxes (Beyond Mortgage):

Property Purchase Taxes & Fees:

• Notary & Registration Fees: Approx. 2%-5% of property price (varies by canton).
• Property Transfer Tax: Typically included within the 2%-5% total cost envelope.
• Mortgage Registration (Pfandbrief): Approx. 0.5%-1% of loan value.

Annual Property Taxes:

• Cantonal/Municipal Annual Property Tax: 0.1%-0.3% of the taxable value annually (varies widely by canton).

Wealth Tax:

• Applies on net assets, including Swiss property (varies significantly by canton; typically 0.1%-1% annually).

Rental Income Tax:

• Rental income is taxable; mortgage interest is generally deductible (subject to local rules and your circumstances).

Capital Gains Tax (CGT):

• Applicable upon property sale; rate declines with length of ownership.
• Rates vary widely by canton (typically 10%-50% based on holding period and canton).

More detail (and examples) on ownership costs and taxes is covered in the guide’s tax section.

Equity Release & Refinancing in Switzerland:

Equity Release:

• Limited; primarily through private banks with substantial pledged assets.
• Usually limited to 30%-40% LTV without substantial asset backing.
• Higher registration and administration fees may apply.

Refinancing:

• Common practice; typically used to benefit from lower rates or improved terms.
• Early repayment penalties may apply (often linked to the interest differential over the remaining fixed term).

Key Considerations:

Documentation Required:

• Passport, proof of address, detailed financial statements (bank/investment accounts).
• Tax returns and evidence of stable income and substantial assets.

Life and Property Insurance:

• Life insurance is not always compulsory but is commonly required or recommended by lenders (case-by-case).
• Property (home/building) insurance is mandatory.

Foreign Currency Risks:

• Mortgages are usually in CHF; borrowers can be exposed to exchange-rate fluctuations if income/assets are held in foreign currencies.

Ownership Structures:

• Usually personal ownership; corporate structures can be permitted but add complexity.
• Trusts recognised in limited cases; specialist advice recommended.

Resale Considerations:

• Limited early repayment flexibility; penalties can apply.
• Capital gains tax applies upon resale and can materially impact net proceeds.

Illustrative Example Scenario:

• Property Purchase: Chalet in Verbier, CHF 2 million.
• Mortgage: 65% LTV (CHF 1.3 million), 10-year fixed-rate at 2.5%.
• Monthly Payment: Approx. CHF 2,700 interest-only, plus amortisation.
• Deposit & Fees: CHF 700,000 deposit + approx. CHF 80,000-100,000 fees (~CHF 800,000 total upfront).
• Annual Property Tax: Approx. CHF 2,000-4,000 depending on canton.

Frequently Asked Questions (FAQs):

Below are quick answers and then deeper FAQs for Swiss mortgages and mortgages in Switzerland. If you want the longer guide format (with tables, examples and more context), read the Swiss mortgage guide. For the latest pricing context, see our news & commentary.

Can Non-Residents Obtain Swiss Mortgages?

Yes, non-residents can obtain mortgages but face stricter eligibility, higher deposit requirements, and must meet asset and income criteria. Read more.

What is the Typical LTV for Non-Residents?

Usually around 60%-70%, often amortised down to around 65% over time. Read more.

Are Interest Rates Fixed or Variable?

Both options are available, with fixed-rate mortgages commonly used for repayment certainty. For current context, see rates news & commentary.

How High are Property Purchase Fees?

Expect total fees (notary, registration, transfer) around 2%-5% depending on canton.

Can Non-Residents Use Equity Release?

Limited options exist, generally through private banking arrangements, typically capped around 30%-40% LTV.

Is Property Insurance Mandatory?

Yes, property (home/building) insurance is mandatory. Life insurance is optional but commonly recommended (case-by-case).

Are There Restrictions on Foreign Buyers?

Yes, non-residents are typically restricted to holiday homes in tourist zones, with regulated quotas under Lex Koller. Read more in the Swiss mortgage guide.

What are the Capital Gains Taxes?

Significant and canton-dependent, typically declining with longer ownership (rates often range 10%-50%).

Are Early Repayment Penalties Applicable?

Typically, yes—often calculated as an interest-rate differential over the remaining fixed term.

What Currency Risks Exist?

Loans are usually in CHF, potentially exposing borrowers to currency fluctuations if income/assets are held in foreign currencies.

Can I get a mortgage in Switzerland as a non-resident foreigner?

Yes, non-residents can obtain Swiss mortgages provided they meet the qualifications. Major Swiss banks and some private banks do offer mortgages to foreign buyers who are purchasing authorised properties. You’ll need to buy an eligible property (usually a holiday home with a Lex Koller permit) and fulfil the bank’s criteria (strong income, big down payment, etc.). It’s not as straightforward as for a local, but many foreigners secure mortgages each year – especially HNWIs with good financial profiles. Engaging a bank’s international mortgage unit or a broker early on is key to understanding your options.

How much can I borrow – what is the maximum Loan-to-Value (LTV) for non-residents?

Typically, Swiss banks lend around 50% to 60% of the property value to non-resident buyers. Some might go up to ~70% if you’re a very strong client or willing to pledge extra assets. In rare cases (with private banking arrangements), financing up to 80-100% can be achieved by collateralising other assets, but purely against the property value, 60% is a common max. Remember, at least 20% of the purchase price must be your own cash (and practically 40% in many cases for foreigners). Plan to put a substantial down payment.

What interest rate will I pay as an international borrower?

You’ll pay roughly the same interest rates that local borrowers pay, because Swiss mortgage rates are based on the market and loan product, not on your residency. Non-resident loans sometimes incur a small surcharge if there’s extra perceived risk or admin, but private banks may match local rates especially if you have a broader relationship. Rates move over time, so for the latest market context use our news & commentary, and for deeper explanation see the guide section on Interest Rates & Financing Costs.

Do I need a Swiss bank account to get a mortgage?

Yes, practically you will need a Swiss bank account. While technically one could get a mortgage without a prior account, in reality the lending bank will require you to open an account with them for the loan disbursement and repayments. In fact, many banks condition lending on you doing some private banking with them. Even if not, you’ll want a local account to pay Swiss bills (utilities, taxes) and the mortgage.

What documentation will banks require from me?

Be prepared to provide extensive documentation, such as:

• Proof of income: tax returns, payslips, company financials if self-employed.
• Proof of assets: bank/brokerage statements showing your liquid assets, investments, other real estate.
• Credit references: possibly a credit report from your country, or at least a declaration of debts.
• Identification: passport, proof of current address.
• Proof of source of funds: documents evidencing where the down payment comes from (AML).
• Property documents: reservation/offer paperwork and property details (agent/notary provides).

Swiss lenders aim to fully understand your financial situation and ensure you can pay the mortgage under stress scenarios. It can feel intrusive, but it’s standard due diligence.

Are there any special conditions for Americans (or other nationalities)?

U.S. citizens and U.S. tax residents can face extra friction due to FATCA. Some Swiss banks do lend to Americans but may require larger assets under management or route you through U.S.-client compliant divisions. There may be extra paperwork. Similarly, some nationalities can face additional compliance checks depending on sanctions/compliance risk, but nationality alone is not always a deal-breaker.

Can I rent out the property when I’m not using it?

Usually yes, if it’s a holiday home acquired under Lex Koller you are typically allowed to rent it out on a short-term basis when you’re not there. What you typically cannot do is rent it out long-term as someone else’s primary residence, because then it’s not really “holiday” use. Always check the wording of your cantonal permit and local rules.

What are the tax benefits of having a mortgage as a non-resident owner?

The main benefit is that mortgage interest is often tax-deductible against rental income or imputed rental value, which can reduce Swiss income tax on the property. Additionally, the debt can reduce net wealth subject to wealth tax (you’re taxed on net equity). Rules are cantonal and fact-specific, so take advice.

Will I have to pay capital gains tax when selling, even as a foreigner?

Yes, Switzerland generally imposes capital gains tax on property profits regardless of residency. The tax is set at cantonal level and is typically higher for short holding periods and lower for long holding periods. Treaties may help reduce double-taxation risk, but assume Swiss CGT applies.

Are there any restrictions on re-selling the property (like can I sell to anyone)?

You can sell to Swiss or foreign buyers, but if selling to another foreign non-resident, that buyer will also need to qualify for a permit. Some cantons can apply minimum hold periods or specific conditions tied to the permit. Check your purchase authorisation and local rules.

What’s the process if I decide to move to Switzerland later?

If you move to Switzerland and obtain a residence permit, the property you bought as a holiday home can often become your primary residence and you typically fall out of the non-resident restrictions regime (subject to specific cantonal conditions). Tax treatment will change once you are Swiss resident.

Could Swiss laws change to restrict foreigners more in the future?

Swiss laws on foreign property ownership have existed for decades and can be adjusted, but existing owners are typically protected (grandfathered) provided they comply with conditions. Minor tweaks can happen, so keep in touch with your notary/lawyer for updates.

How long does the whole buying process take for a foreign buyer?

Typically, 2 to 4 months from finding a property to closing, depending on mortgage approval timelines and permit processes (where relevant), as well as seller/buyer logistics.

What are typical notary and purchase fees I should budget for?

Budget roughly 3% to 5% of the purchase price for all closing costs (notary, land registry and any transfer taxes), depending on the canton. Always ask the notary for an early estimate so you can hold sufficient cash alongside your deposit.

Can I use financing from a bank in my home country to buy Swiss property?

Usually Swiss property is financed by Swiss lenders, but you can raise funds elsewhere (e.g., against assets in your home country) and buy in cash. That “home bank” financing is typically not secured on the Swiss property unless the lender has a Swiss presence and registers collateral locally (uncommon).

Will the bank revalue the property regularly or call in the loan if market drops?

Swiss banks do not typically revalue and demand repayment solely due to normal market fluctuations. As long as you meet payment and contractual obligations, loans are generally not “margin called” like securities-backed lending.