Choosing whether to buy a house or an apartment: complete guide

Buying a house or an apartment is often presented as a lifestyle choice: garden versus balcony, peace and quiet versus proximity to the city centre, freedom versus simplicity. This comparison is convenient, but it leaves out much of what will actually determine whether your purchase was a sound decision five, ten or twenty years later.

In Switzerland, two homes sold for exactly CHF 900’000.– can require the same equity and the same mortgage while presenting very different financial risks. A house may let you decide when to replace the roof, but require you to finance the necessary CHF 60’000.– on your own. An apartment held as condominium ownership (PPE) may spread costs among several owners while still requiring you to pay your share of a renovation approved by the owners’ meeting.

To buy a house or an apartment intelligently, you therefore need to look beyond the advertised price. You need to determine who controls expenditure, when costs may arise, what reserves already exist, how the property will be assessed by a lender and under what conditions it could later be resold.

The right home is not necessarily the one with the most square metres. It is the one whose advantages will genuinely be useful to you and whose constraints will remain manageable when your life changes.

Buying a house or an apartment: compare three budgets, not just one

A property search often begins with the maximum amount entered in a portal’s filters: CHF 800’000.–, CHF 900’000.–, CHF 1’000’000.–.

Yet that amount is only the first budget.

When buying a house or an apartment, you should distinguish between three:

• the price the lender is willing to finance;
• the price your household can comfortably afford;
• the amount of capital you can tie up without depleting your safety reserve.

These three amounts are rarely identical.

Your mortgage affordability is not your personal budget

For an owner-occupied primary residence, the minimum standards recognised by FINMA notably require at least 10% of the lending value to come from equity that does not originate from the 2nd pillar. The mortgage debt must also be reduced to two-thirds of the lending value within a maximum of fifteen years.

Lenders also calculate affordability using prudent parameters to verify that a household could withstand borrowing costs significantly higher than the rate actually being paid.

This analysis answers a banking question: “Does this loan represent an acceptable risk?”

It does not answer another question: “Do you really want to devote that much of your income to housing?”

A couple may fully meet the criteria required to buy a house or an apartment for CHF 1’000’000.– and still prefer to limit the project to CHF 850’000.– so they can continue travelling, reduce their working hours or keep savings readily available.

This is not about financial affordability, but financial freedom.

The real indicator: how much will remain in your account after you receive the keys?

Suppose you have CHF 260’000.– available.

Putting CHF 240’000.– into the purchase reduces your debt. But if your remaining reserve is only CHF 20’000.–, replacing the heating system or a call for additional PPE funds can become problematic.

Conversely, keeping more liquidity while carrying a slightly larger mortgage can sometimes provide greater security.

Before looking for an apartment or house for sale, make a calculation that rarely appears in property listings:

liquid assets before purchase – equity – acquisition costs – immediate work = reserve actually available after the purchase.

This final line can sometimes distinguish between two properties that appeared equivalent when looking at price alone.

House or apartment: the financial risk lies in different places

A common mistake is to assume that a house is expensive to maintain while an apartment is relatively predictable.

The reality is more nuanced.

With a house, you bear almost all the cost of major components yourself, but you generally control when the work is carried out.

In a PPE, you share expenditure relating to the common parts, but you also share decision-making power.

House: concentrated financial risk, but greater control. PPE: pooled risk, but partly imposed on you.

This is one of the most important differences when deciding whether to buy a house or an apartment.

A house does not cost 1% in maintenance every year

A theoretical allowance of around 1% of the property’s value is often used to represent maintenance costs.

The figure is useful for long-term budgeting, but it does not describe reality very well.

A roof does not charge you CHF 300.– every month for thirty years. It costs almost nothing in some years, then tens of thousands of francs when major work becomes necessary.

The same applies to:

• the heating system;
• the windows;
• the façade;
• the insulation;
• the pipes;
• drainage;
• retaining walls;
• outdoor installations and landscaping.

For a house or an apartment for sale in an older building, the age of these components is often more informative than the amount spent during the previous two years.

An owner who has spent almost nothing for fifteen years does not necessarily own an economical building. They may simply own fifteen years of deferred maintenance.

In a PPE, a large renovation fund may be insufficient while a small fund may be perfectly healthy

Consider two buildings.

Condominium ownership (PPE) A has CHF 400’000.– in its renovation fund.

PPE B has only CHF 150’000.–.

At first glance, A appears much safer.

But imagine that A will soon have to replace the roof, façade and heating system for CHF 1’000’000.–, while B renovated all three four years ago.

The size of the fund in isolation is therefore not enough to assess a PPE.

When you are considering buying an apartment or a house, analyse instead:

existing fund + planned future contributions – probable work over the coming years.

And above all, read the minutes of the owners’ meetings.

A seemingly innocuous sentence such as “the refurbishment of the balconies will be discussed again at the next meeting” can have greater financial significance than ten pages of sales brochure.

Little-known Swiss feature: a PPE renovation fund is not mandatory

This is something you should check systematically.

Swiss law currently in force does not require PPEs to establish a renovation fund. A condominium can therefore legally exist with a very small fund, or even without one.

This is why a PPE without substantial reserves should not simply be classified as having “low charges”.

It may also mean: “the previous owners have not yet set aside the money that future owners will have to spend”.

Buying an apartment or a house: examine what you will actually own

With a conventional detached house, ownership is relatively intuitive: the building and land belong to the owner, subject in particular to easements and public-law restrictions.

In a PPE, the legal reality is more subtle.

You own a co-ownership share in the building together with an exclusive right over certain defined parts, generally your apartment.

This distinction becomes important when the brochure mentions a “private garden”, terrace, outdoor parking space or certain installations.

A “private garden” is not always land that you own

An outdoor area marketed as private may legally be a common part subject to a special right of use.

That is not necessarily a problem.

But an exclusive ownership right and an exclusive right of use are not the same thing.

Before buying an apartment or a house, therefore check not only what you will be allowed to use, but also under what legal title.

A beautiful 100 m² garden should not automatically be interpreted as 100 m² of land that you own individually.

For a house, look beneath the land before looking at the kitchen

A kitchen can be replaced.

A plot of land is much harder to move.

For a house, examine in particular the land-register extract and the easements: rights of way, rights of residence, utility lines, building restrictions, reduced building distances or other rights that could limit how the land may be used.

It is also relevant to consult cantonal natural-hazard maps and available information on radon or surface-water runoff when the property’s location warrants it.

This leads to a simple rule:

decorative defects are visible and negotiable; constraints attached to the land can be discreet and long-lasting.

If two houses are offered at the same price, a plot with better future development or use potential may justify a value difference far greater than that of a more recent kitchen.

House or apartment: calculate the cost of your lifestyle, not just the home

Location directly affects the property’s value, but also your budget after the purchase.

An apartment often costs more per square metre when located in an urban centre. A house can offer much more space if you move farther away from the city.

The trap is to compare only these two prices.

A second car can turn a cheaper house into a more expensive home

Imagine two possibilities:

• an apartment costing CHF 950’000.– near a railway station;
• a house costing CHF 850’000.– located twenty kilometres away.

The CHF 100’000.– difference seems significant.

But if the house requires a second vehicle for fifteen years, add its purchase or lease, insurance, tyres, maintenance, energy, parking and additional kilometres.

The appropriate calculation when buying a house or an apartment then becomes:

housing + mobility + commuting time.

The third item appears on no mortgage instalment, but it may be the one you regret most.

One additional hour of travel per day amounts to more than 200 hours over a working year.

Unused square metres are also financed with borrowed money

A 180 m² house is not automatically better than a 115 m² apartment.

If you genuinely use four bedrooms, a workshop, an office and the garden, the additional space creates value for you.

If two bedrooms are mainly used for storage, you have bought, heated, insured and maintained an exceptionally expensive storage area for cardboard boxes.

When looking for an apartment or a house for sale, assign a specific function to each space.

This method reveals an unusual but useful indicator:

the price per square metre actually used.

A smaller home with a better layout and location can be much more attractive than a property that looks superior on paper.

Think now about the owner you will be in twenty years

Buying a house or an apartment at age 40 potentially means still living there at 60 or 70.

A house with three levels, a large garden and fifteen steps to the entrance may provide a wonderful setting today and become less practical as you age.

An apartment without a lift obviously has the same weakness.

You should therefore examine:

• the stairs;
• accessibility;
• the distance to shops;
• proximity to public transport;
• the amount of physical maintenance required;
• the possibility of creating a bedroom and bathroom on the same level.

A property suited to several stages of life will also have a broader potential market when it is resold.

New, recent or older property: add a second dimension to your choice

Choosing between a house and an apartment is not enough. You must then choose between new, existing or older property and compare the building’s age, technical characteristics and stage in its lifecycle.

A new home generally limits immediate renovation work and benefits from recent energy standards. An existing home, by contrast, lets you observe what you are actually buying: light, neighbours, noise, vegetation, traffic and the building’s behaviour have already been tested in real life.

New construction removes certain risks and creates others

A project bought off-plan normally reduces the risk of having to replace the roof in five years.

But it introduces other uncertainties:

• a final result that differs from what you imagined;
• finishing choices that must be made quickly;
• the cost of modifications requested by the buyer;
• the delivery date;
• the evolution of a neighbourhood that is still unfinished;
• the actual quality of execution.

New and older property are therefore not a choice between “risk-free” and “risky”.

They simply shift the risk.

The gap between the purchase price and the bank’s valuation can change your project in minutes

This is probably one of the most important checks to make before submitting an offer.

You want to buy a house or an apartment for CHF 950’000.–.

You plan to provide 20% equity and take out a CHF 760’000.– mortgage.

But the lender assesses the lending value at CHF 900’000.–.

The minimum standards provide that any positive difference between the price paid and the lending value must be financed entirely with equity that does not come from the 2nd pillar.

In other words, the bank does not necessarily finance your enthusiasm.

A price accepted by the buyer and seller is not automatically the value accepted by the lender.

This is precisely why it is useful to have an apartment or house for sale assessed in relation to your mortgage application before committing yourself definitively.

A mortgage adviser can also present the project to several lenders. Internal criteria and valuation methods may differ, allowing you to compare several solutions rather than depend on a single bank’s response.

Buying a house or an apartment for CHF 900’000.–: two different risks

Now consider two purchases of CHF 900’000.– with:

• CHF 180’000.– in equity;
• a CHF 720’000.– mortgage, i.e. 80%;
• a hypothetical rate of 2% to make the scenarios comparable;
• no amortisation in the table, in accordance with the comparison assumption.

This last assumption is deliberately theoretical. For an owner-occupied primary residence financed according to usual banking standards, debt representing 80% of the lending value normally has to be reduced to two-thirds within a maximum of fifteen years.

Scenario A: detached house costing CHF 900’000.–

Item	Assumption	Amount
Purchase price	Detached house	CHF 900’000.–
Equity	20%	CHF 180’000.–
Mortgage	80%	CHF 720’000.–
Acquisition costs	Calculation assumption: 3%	CHF 27’000.–
Annual interest	2% on CHF 720’000.–	CHF 14’400.–
Potentially declarable debt interest under the current system	Subject to the overall tax situation	CHF 14’400.–
Annual technical reserve	Budget assumption: 1%	CHF 9’000.–
Responsibility for work	Individual	100% owner

The figure to focus on is not only the CHF 9’000.– annual reserve.

The owner must be able to absorb the volatility of this expenditure: roofs, heating systems and windows may decide not to respect your Excel budget.

Scenario B: PPE apartment costing CHF 900’000.–

Item	Assumption	Amount
Purchase price	PPE apartment	CHF 900’000.–
Equity	20%	CHF 180’000.–
Mortgage	80%	CHF 720’000.–
Acquisition costs	Calculation assumption: 3%	CHF 27’000.–
Annual interest	2% on CHF 720’000.–	CHF 14’400.–
Potentially declarable debt interest under the current system	Subject to the overall tax situation	CHF 14’400.–
PPE charges	Assumption: CHF 650.–/month	CHF 7’800.–
Extraordinary work	Depending on reserves and PPE decisions	Cannot be predicted without analysis

These two examples show why buying a house or an apartment at the same price does not result in the same risk profile.

The house requires a personal reserve.

The PPE requires you to understand the collective reserve.

You can test our mortgage calculator to get an idea of the structure of your future mortgage financing.

And the CHF 14’400.– in interest: how much can you deduct for tax purposes?

CHF 720’000.– × 2% gives CHF 14’400.– in annual mortgage interest.

Under the tax system currently in force, private debt interest can in principle be deducted within the statutory limits. In a simple case where the overall limit has not been reached, the CHF 14’400.– can therefore be declared as debt interest.

But deducting CHF 14’400.– never means saving CHF 14’400.– in tax. The deduction reduces taxable income; its effect then depends on your tax situation.

And this mechanism now has an end date for many owner-occupiers.

In 2029, the imputed rental value will be abolished for owner-occupied homes, but maintenance costs will no longer be deductible and the deduction of debt interest will be severely restricted. A temporary deduction will remain, in particular for certain first purchases of a primary residence in Switzerland.

A person who wants to buy a house or an apartment in 2026 for a twenty-year horizon should therefore not choose their debt strategy solely on the basis of today’s tax rules.

How can you choose without turning the decision into a 47-criteria spreadsheet?

At this point, it would be easy to produce an endless checklist.

A more effective method is to test each property against four risks.

Financial risk: how much will you have to pay if the adverse scenario occurs?

Dependency risk: who can decide on expenditure or a modification without you having sole control over the decision?

Use risk: will the home remain suitable if your work, family or mobility changes?

Exit risk: how many buyers could reasonably want this property when you decide to sell it?

A highly personalised house may be perfect for you while reducing the number of future buyers.

A very standard apartment may offer less freedom but be immediately understandable to a broader market.

When buying a house or an apartment, therefore look less for the “ideal” property than for a property whose trade-offs you fully understand.

FAQ: buying a house or an apartment in Switzerland

Buying a house or an apartment: finance your project first, then your square metres

The final choice therefore cannot be reduced to “house or apartment”.

A house generally offers greater control, privacy, land and possibilities for alteration. In return, it concentrates major responsibilities and expenses on its owner.

A PPE apartment shares some of these responsibilities and often gives access to locations where a house would be financially out of reach. In return, you are also buying a share of a building, a set of rules, collective governance and sometimes decisions that are already being prepared.

Before buying a house or an apartment, ultimately ask yourself three questions:

• will I genuinely use what I am paying for?
• can I absorb expenses that I cannot yet see?
• will my financing remain comfortable if my situation changes?

If the answer to the third question is unclear, it is better to resolve the financing before falling in love with the property.

A mortgage adviser can determine your borrowing capacity, compare your project with the criteria of several lenders and compare the available financing solutions. This process also makes it possible to identify quickly whether the proposed price, level of equity or mortgage structure is likely to cause a problem.

Submit a request now to receive mortgage proposals that can help you buy the property you want.

An apartment or house for sale can disappear from the market.

Your finances, however, will still have to live with the purchase long after the keys have been handed over.

Are you considering buying a house or an apartment in Switzerland? Have your financial affordability and project assessed before committing yourself so that you know your true margin and the financing possibilities available from several lenders.

Disclaimer: the information presented in this guide is general and does not constitute an offer of financing or personalised legal or tax advice. Mortgage conditions, tax consequences, acquisition costs, PPE rules and property-related costs depend in particular on the lender, canton, municipality, property and the buyer’s personal circumstances. The figures used in the examples are provided solely to illustrate the mechanisms described.

Main institutional sources: Swiss Financial Market Supervisory Authority (FINMA) for the minimum requirements relating to mortgage financing; Swiss Confederation – Federal Office of Justice for the current status and proposed revision of condominium ownership law; Federal Tax Administration (FTA) for the reform of owner-occupied residential property taxation.