Mortgage loan in Geneva

The Swiss mortgage procedure in 10 steps

When buying a house in Switzerland, obtaining a mortgage is often a fundamental first step on the road to homeownership. This procedure may seem complex, particularly because of the costs and incentives it involves.

This 10-step guide will show you what to do and what to consider before making Switzerland your permanent place of residence.

Be neither a borrower nor a lender; Because we often lose the loan and the friend, And the loan… William Shakespeare

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

Switzerland has a strict set of rules for obtaining a mortgage loan. These rules extend to special criteria for non-Swiss buyers and people with a residence permit in Switzerland. The basic requirements for a Swiss mortgage must be met to start looking for a house.

Step 2: See What You Can Afford

If you have met the basic conditions to obtain a Swiss mortgage, it is important to see what type of housing you can afford. In Switzerland, mortgages are mainly controlled by banks. However, there are mortgage brokers who can offer you a formula better suited to your needs. Buying a home is sometimes less expensive than renting a house or apartment, but it’s important to know if it’s the best choice for your budget.

Here are some of the things to consider when determining if you can afford a mortgage:

• Will I be able to pay the mortgage fees and costs?
• How will the taxes, fees and costs of buying a home affect what I can buy?
• Is my professional income sufficient to allow me to make regular mortgage payments?
• Do I have enough savings to finance a down payment on a mortgage?

Step 3: Get an agreement

Once you think you have met all the requirements, the next step is to check whether your application for mortgage is accepted. There are many types of mortgages in Switzerland, many of which come with flexible rates and additional requirements. Once you have chosen your provider and mortgage type, you can explore options for financing your move to your dream home.

Step 4: Find your new home

Once you have received tentative approval, it is time to start exploring options for purchasing a home. Choosing the right location and considering proximity to schools and public transportation is essential. If you’re looking to start a family, you may need to think about proximity to hospitals and childcare. Once you have found the right house and location for you, you can consult your real estate agent who will pay your reservation deposit (often a fixed amount of around 500 to 2,000 Swiss francs) and begin the buying process of the property.

Step 5: Submit your Swiss mortgage loan application

Once you’ve found a home that’s in the right location and fits your budget, you can go ahead and apply for your mortgage with your bank. After processing, in most Swiss banks you will receive an invitation to speak with a financial manager in the nearest Swiss city. He will present to you the possibilities and risks associated with purchasing a new property and will suggest ways to reduce costs by developing a tailor-made program.
Once you have explored all the options available to you and your mortgage application has been approved, you can begin the process of purchasing the property.

Step 6: Signing a purchase contract in Switzerland

In Switzerland, all contracts relating to the purchase of land or property must be co-signed by a notary. If your canton has a system of private notaries, you can freely choose your notary. In most cantons, you must contact the official notary of your municipality (Gemeinde). As a general rule, notaries can be found at the tax office or at the commercial register of your municipality.

How much do the services of a notary cost in Switzerland?

Generally, notaries are paid jointly by the seller and the buyer as part of the sales contract. The amount of notary fees varies from one canton to another, but on average it is estimated at around 0.1% of the value of the property purchased.

Step 7: Buy your new home

Once you have signed the purchase contract, you, your real estate agent or your notary must provide the mortgage credit institution with the seller’s full contact details. He will then pay the seller the appropriate amount for the property and notify you of the conclusion of the sale. Once this step is completed, you are almost ready to move into your new home.

Step 8: Pay housing tax in Switzerland

In some cantons there is a property transfer tax, a real estate gains tax and a nominal property tax. These are taxes that the seller and buyer must pay at the time of transfer. You can find more details on property taxes in a guide to taxes, costs and fees related to buying a house in Switzerland.

Step 9: Setting up utilities

Once you begin moving into your new home, you will need to ensure that all utilities are ready for your arrival. This operation is carried out either by the seller when purchasing, or by the buyer when moving in. When you arrive it is important that you have registered water, energy and internet for the property to avoid refusal of service and unnecessary costs.

Step 10: Moving in

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