Swiss mortgages for expats: what you can borrow, and how
Swiss lending rules are strict but predictable: at least 20% equity, a notional 5% affordability test, and the one-third rule. Understand them - and check what you can afford below - before you fall for a listing.
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The two rules that decide everything
Every Swiss mortgage comes down to two tests: enough equity (at least 20%, with 10% in hard cash) and affordability (total housing cost under about a third of income at a notional 5% rate).
The equity test is strict. You need at least 20% of the purchase price as your own funds, and at least half of that (10% of the price) must be hard cash or securities - a savings account, taxable brokerage, or similar. The other 10% can come from your pillar 2 or pillar 3a.
The affordability test is where many would-be buyers get stuck. Banks don't use today's real interest rate; they stress-test at a notional ~5%. On top of that they add amortisation and maintenance (usually about 1% of the property value per year). The combined annual cost must stay under roughly a third of your gross income - the so-called one-third rule.
The logic is defensive: if rates rise, your payments still have to look comfortable on paper. It's why a couple earning a solid Swiss salary can still be told they can't afford a home that looks affordable at today's rates.
First and second mortgage, and amortisation
Banks split the loan into a first mortgage of up to about two-thirds of the value, and a second mortgage for the rest up to 80% - which must be repaid over roughly 15 years.
The first mortgage - up to around two-thirds of the property value - has no mandatory repayment. Many Swiss homeowners keep it in place for decades, because the interest is deductible and the debt itself lowers taxable wealth.
The second mortgage covers the slice between that first tranche and the 80% loan-to-value ceiling. This portion must be amortised - repaid - over approximately 15 years, or by retirement, whichever comes first.
You can amortise directly (paying the loan down every year) or indirectly through a pillar 3a account. Indirect amortisation is usually more tax-efficient: the mortgage stays large (so interest and wealth deductions stay intact), and you build capital in a pillar 3a that eventually settles the debt. See our page on pillar 3a for the mechanics.
Fixed vs SARON
You'll choose between a fixed-rate mortgage, where the rate is locked for a set term, and a SARON mortgage, which floats with the Swiss reference rate.
A fixed-rate mortgage, usually written for 2 to 10 years, locks your rate for the whole term. Your monthly cost is fully predictable - useful if your budget has little room to absorb surprises, or if you simply value peace of mind.
A SARON mortgage floats with the Swiss Average Rate Overnight, plus a bank margin. Historically it has been cheaper on average than fixed, but the rate can move up or down from quarter to quarter, so your monthly cost varies.
The right answer depends on how sensitive your budget is to rate changes and your risk appetite. Many homeowners split their financing across tranches - part fixed, part SARON, possibly with different maturities - to balance certainty and flexibility.
Expats, permits and Lex Koller
B and C permit holders can generally get a mortgage on their primary residence on similar terms to Swiss residents.
Lex Koller restricts non-residents from buying holiday homes or pure investment property in Switzerland. But it does not restrict your own primary residence: if you live and work in Switzerland on a valid permit, the home you actually live in is treated much like any Swiss buyer's.
You can use pillar 2 and pillar 3a toward the purchase - either by withdrawing or by pledging them. Pledging leaves your pension intact but uses it as collateral; withdrawing gives you cash but reduces future retirement benefits and triggers a (relatively low) withdrawal tax. See our page on the pension fund (2nd pillar).
Because banks and insurers price mortgages very differently, independent broking helps you avoid paying a “loyalty premium” to whichever bank you already have your salary with. For expats especially - unfamiliar with the Swiss market, sometimes without a long local credit history - a proper comparison across banks, cantonal banks, insurers and pension funds often saves several thousand francs per year.
What can you actually afford?
Enter your income, equity and target price - we'll apply the standard Swiss 5% notional test and the one-third rule.
Your numbers
At least 20% of the price, and at least 10% in hard cash (not pension money).
Your affordability
Looks affordable
Costs are 28.9% of gross income and loan-to-value is 75.0% - within standard Swiss rules.
Annual imputed cost
Indicative only, based on standard Swiss lending rules (as of 2025) - not a lending offer. Banks vary.
Get an independent mortgage assessment
Tell us a little about your situation - an expat advisor will come back within one business day.
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OpenSwiss mortgages - your questions, answered
How much can I borrow for a Swiss home?
Swiss banks require at least 20% equity and test affordability at a notional rate of about 5%, keeping total housing cost under roughly a third of gross income. Use the affordability calculator above to see a realistic figure for your situation.
How much equity do I need?
At least 20% of the purchase price, and at least half of that (10% of the price) must be hard cash or securities rather than pension money. The remaining 10% can come from your pillar 2 or 3a.
Can I use my pension to buy a home?
Yes. You can use pillar 2 and pillar 3a toward a primary residence, either by withdrawing or - often smarter - by pledging them. Each route has tax and pension consequences worth checking first.
Should I choose a fixed or SARON mortgage?
A fixed-rate mortgage locks your rate for a set term and gives certainty; a SARON mortgage floats and is usually cheaper on average but variable. It comes down to how sensitive your budget is to rate changes.
Can expats on a B permit get a mortgage?
Yes - B and C permit holders can generally get a mortgage on a primary residence on similar terms to residents. Lex Koller restricts holiday and investment properties for non-residents, but not your own home.
What is amortisation?
It's repaying the second mortgage down to about two-thirds of the property's value over roughly 15 years. You can do it directly, or indirectly via a pillar 3a account, which is usually more tax-efficient.
Know what you can afford - before you fall in love with a listing
Run the numbers with the Swiss rules built in, then talk to an independent advisor about the best structure - fixed vs SARON, direct vs indirect amortisation, and how to use your pension pillars wisely.