international mortgages

switzerland

Essential information for buying properties in Switzerland

Buying property abroad is not necessarily the same as buying in the UK, there is other essential information you need to be aware of both before and during your property purchase.

It is of paramount importance to seek independent advice from a lawyer specialising in Swiss law prior to signing the preliminary contract/”Promesse de Vente”.

You need to ensure that you will have full title to the property on completion and that you have the appropriate documents available for the lender.

It is strongly advised that you secure the financing of the property before signing the "promesse de vente". The bank will require a copy of this document, however you are able to sign this contract with the clause “subject to mortgage finance and valuation” as the contract, once signed is legally binding. Keep in mind that the deposit paid at the signing will be lost if the sale is not completed, the deposit amounts usually to 10% of the purchase price.

You should be aware that not all Swiss lenders carry out valuations and/or surveys. You may wish to have one carried out independently, and this is advisable as this will highlight any structural or building defects such as subsidence, damp, wiring etc. and most importantly, any valuation should point out any potential boundary disputes.

Properties can be purchased either individually, in joint names or in the name of a company. For advice regarding whether to purchase under a company, independent legal advice should always be sought.

You should check with the estate agent and/or your lawyer that you are aware of the costs charged by legal and Government authorities for buying a Swiss property. These associated fees/taxes are typically between 10% - 15% of the properties purchase price.

Be aware that the Notaire may be incorporating costs for assigning the mortgage and creating the mortgage certificate within his charges. You should establish with the Notaire the actual cost before signing any contract.

A life assurance policy could be required depending on the lender’s credit policy. A fire insurance required in all cases.

A Swiss bank account will be required, and you will be requested to be present to signing the proper documentation before the release of funds.

Eligibility and criteria

We typically arrange loans in Swiss Francs only
Repayment and Interest only loans are available
The maximum loan to value for a purchase is 60%
The maximum term is 40 years up to age 70
The minimum loan amount is £200,000 sterling equivalent

Affordability

To qualify for a mortgage in Switzerland, a calculation is used to establish whether you can afford to maintain the mortgage repayments. This will automatically happen when you complete our enquiry form, and we will not charge you for this service.

Your existing liabilities, including your UK mortgage or rental payments, loans, credit card payments and maintenance are taken into account, together with the proposed Swiss mortgage payments. All this must not typically exceed 35% of your monthly net income. For example if your net joint income is £2500, 35% of this equates to £875. If your only liability is your current UK mortgage payment of say £300 per month, this would leave a balance of £575 for your Swiss mortgage repayment.

The amount that you can borrow is also restricted by the maximum loan to value as mentioned under Eligibility and criteria.

Proof of income requirements

If you are employed:

Your last three month’s payslips
Your latest P60 and employers reference
Your last three month’s personal bank statements

If you are self-employed:

Your last two year’s audited accounts, tax returns and accountants reference
Your last 3 month’s personal bank statements

Other documents will be required and will be confirmed when application forms are sent to you.

If you would like to speak with a representative to discuss your requirements please call +(34) 677 874 948

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