Mortgage: definition
A mortgage is the financing you obtain to buy or renovate a property, generally in the form of a mortgage secured on the property.
Mortgage at a glance
In Switzerland, people often refer to a mortgage rather than “crédit immobilier” or home loan, but the idea is the same: you obtain long-term financing for your project, with terms on rates, duration and amortisation suited to your situation. Banks assess your borrowing capacity before approving the application.
How a mortgage works
For example, to buy a house priced at CHF 1,000,000, you contribute CHF 200,000 in equity and apply for a mortgage of CHF 800,000. The bank checks that your costs (theoretical interest at 5 %, amortisation, maintenance costs) do not exceed roughly one third of your gross income.
Resources to get a mortgage
- Budget for a mortgage
- Current rates
- Mortgage broker
