Buying a home in Switzerland: the insider tips you need to know

Switzerland is a wonderful country to discover, explore and to settle in. Increasingly, international workers are choosing to purchase a property there. Together with Swiss mortgage specialist Hyppo.CH, we look at some of the challenges this raises.

Buying a home in Switzerland: the insider tips you need to know
Photo: Getty Images

So you’ve decided that you want to buy a home. You’ve looked at a few neighbourhoods, you’ve done some research and you’re ready to take the plunge. So what now?

Hyppo helps expats in Switzerland secure their dream property with mortgage advice – find out more

Recognize the differences

While there are differences between every country when it comes to mortgages, there are some particular quirks that you might not be aware of.

For example, mortgages are structured over a much longer period than you may be used to – 50 years being fairly common. Indeed, mortgages are often passed on from generation to generation! One benefit of these longer mortgage periods is that you get some pretty spectacular interest rates.

On the other hand, if you come from certain countries and have not yet secured residence, you may need to apply for a special buying permit to purchase a property.

If you use a home financing tool such as Hyppo, which has a keen understanding of the mortgage market in Switzerland, you will often find that you have more buying power than you think.

When it comes to buying a property in Switzerland, your purchasing power may be far higher than you think. Learn more with Hyppo.

Know what you’re working with

Speaking of affordability, Switzerland’s flexibility with how you’re able to fund your mortgage means that putting together a deposit may be one of the easiest steps in the process.

For example, Switzerland allows you to fund your mortgage with your pension fund. While there are many in their early stages of their career who won’t have accrued enough for an entire deposit, it can be the difference between purchasing a good and a great property.

Hyppo walks prospective homeowners through a series of carefully devised questions, in order to gauge exactly what financial resources they have – even if they might not be aware of them yet. From there, Hyppo is able to present them with a potential offer.

Pic: Getty/fotoVoyager

Organize your paperwork

Obtaining a mortgage can be a complex process, with many steps and lots of paperwork. As a country where three languages are spoken, and cantons with differing requirements for home ownership, it can seem almost impossible.

This means that you will need to keep immaculate records of every step in the mortgage acquisition process – you will often be asked to show proof of various things, and this will mean a lot of back and forth between you, the bank and lawyers.

If you opt to optimize your mortgage with Hyppo, much of the pain of this part of the process can be removed. As one of the first digital mortgage specialists in the country, they can walk you through every step in the process and help you keep everything in order. You’ll be able to refer to them for specialist assistance at any stage from start to finish, and you’ll have more time to do the important stuff – such as getting to know your new neighbourhood.

Best of all, with Hyppo, there is no financial obligation during the inquiry process, and you’ll work with them knowing that they’re specifically designed to assist international professionals in the same position as you.

Take the next step and begin your Swiss property purchase with Hyppo

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Can foreigners apply for (and get) a mortgage in Switzerland?

If you are a foreign national and want to buy property in Switzerland, you may be wondering whether you are eligible for mortgage. The answer depends on several factors.

Can foreigners apply for (and get) a mortgage in Switzerland?

The most important condition for being able to obtain a Swiss mortgage is your residency status. So the question should be not whether you qualify for a mortgage but, rather, if you can purchase property in Switzerland in the first place.

Logically, if you are allowed to buy a house or an apartment in Switzerland, then you can apply for a mortgage as well.

Who can and can’t buy a house / get a mortgage?

A citizen of an EU / EFTA state can freely purchase real estate (home or land) in Switzerland. This applies to both primary residence and holiday homes.

The same is true for third-country citizens, say US or UK nationals, who have a valid permanent residency B or C status — there are no restrictions placed on them either.

However, rules are in place for people from outside Europe who don’t have either of the two above-mentioned residency permits.
They will need a permission to purchase housing in Switzerland — a measure intended to prevent Swiss properties from falling into foreign hands.  

Additionally, they can only buy a house which will be used as the primary residence — this means that they can’t buy it as an investment and rent it out.

And if you are a cross-border worker in Switzerland (G permit), you can buy a second home in the vicinity of your  place of employment without authorisation. However, you are not allowed to rent out this property for as as long as you work in the region as a cross-border commuter.  

Conditions are even stricter if you a foreigner living abroad — rules for such purchases are set out in a law called Lex Koller and are quite complex.

Unless you are looking to buy holiday homes in Appenzell Ausserrhoden, Bern, Freiburg, Glarus, Grisons, Jura, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen, Schwyz, Ticino, Uri, Vaud and Valais, you will need a special permission as well.

READ MORE: ‘Lex Koller’: What are Switzerland’s rules for foreigners buying property?

Where can you ask for authorisation to buy a house?

If you are among those who need a special permission to own a house, you should apply for permission to cantonal authorities in the municipality where the property located.

Page 13 of this PDF document indicates contact addresses for each canton.  Officials will indicate what paperwork you need to submit for consideration of your case.

What about mortgages?

Needless to say, if your application is rejected, you will not be given a mortgage either.

If it is approved, then you can apply in pretty much the same way as Swiss citizens do, though you will be asked to provide additional documents, such as your work / residency permit, for example, along with the canton’s authorisation.

From then on, it is up to you and your financial abilities to choose the mortgage that suits you best from among several types available in Switzerland, such as SARON and LIBOR mortages, which are detailed here:

EXPLAINED: What is Switzerland’s ‘SARON’ mortgage?