Mortgages in Switzerland
When it comes to mortgages, Switzerland is special! It has a unique system of mortgages and there are many, many rules and restrictions governing who can obtain one, under what circumstances and for how much. Switzerland is rare in that it is actually written into the constitution that residential property ownership is to be encouraged and facilitated. Mortgages being an integral part of property ownership, therefore, should be a piece of Swiss cake. But they're not. Oh no, and the confederation itself is deliberately (and un-constitutionally) making it harder and harder for the average person to obtain a mortgage. They are petrified that a U.S. style housing bubble could occur, and one of the few tools open to them is rendering access to finance as difficult as possible. 
Here are the main hurdles
- Maximum finance limited to 80% of purchase price
- Must provide at least 10% of the purchase price in cash
- Can only extract up to 10% from a pension fund, and must satisfy special conditions
- Banks will only lend approximately 80% of their own estimate of the property value
- Banks are risk averse and drastically underestimate market worth
- Banks apply a tough affordability calculation, that you must satisfy
- Stamp duty is a tax imposed at approx. 3.3% of the purchase price
- Solicitor/Notary fees can represent a further 1-2%
- Property prices are eye-wateringly high
If you can get past these hurdles, however, you will land in a relative El Dorado where:
- Interest rates are around 1%
- All interest payments are tax-deductible
- Repayments can be made via a tax efficient 3rd pillar pension fund
- Once you've repaid the 2nd tier of the mortgage, then the 1st tier becomes interest only and repayable only on sale of the property
- Inheritance tax in most communes in minimal or non-existent
- You escape from mean-spirited letting agencies!
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