Mortgage Calculator

Are you considering purchasing real estate in Switzerland?

To precisely determine your borrowing capacity and the cost of your future loan, use our online mortgage calculator. Based on the calculation methodology used by Swiss banks, this tool provides you with a detailed simulation incorporating all the parameters in just a few clicks.
We explain how it works and the key elements to consider for your mortgage.

How our mortgage calculator works

Our mortgage simulator is based on the main criteria analyzed by lending institutions to determine loan terms:

• Your annual income (gross annual salary, bonuses, 13th salary)
• Purchase price of the property
• Equity (your cash contributions, savings, donations, 2nd pillar)
• Fixed rate term (for a calculation with a variable rate, contact us)
• Your loan rate

Based on this data, our mortgage calculator’s algorithm accurately displays :

• Share of your own funds (%)
• Loan amount
• Share of loan (%)
• First mortgage amount
• Second mortgage amount
• Actual annual interest
• Notional annual interest
• Mandatory annual depreciation
• Annual property maintenance costs
• Total actual annual costs
• Total notional annual costs
• Required annual salary
• Expenses to income ratio
• Cost per month (monthly mortgage payments) for your wallet

The results are presented in A convenient tool with all the information you need to make the right decision. You can see the concrete impact of a change in interest rate, term, or amortization. You can adjust the parameters to define the optimal financing plan, based on your budget and goals.

Mortgage Mechanism in Switzerland

A mortgage is a loan secured by a real estate pledge. In the event of borrower default, the bank can foreclose on the property to recover the loaned funds. In return for this guarantee, it normally finances up to 80% of the property’s value (lending ratio), with the remaining 20% ​​constituting the required equity (see types of equity).

Example: For a property worth CHF 1,000,000, the bank can lend up to CHF 800,000. The buyer must have a down payment of CHF 200,000.

Beyond these basic rules, each application is analyzed according to the lending institution’s own criteria (maximum loan repayment rate, property valuation, income, professional stability, age, etc.). Hence the benefit of using a mortgage broker to find the most advantageous solution. It won’t cost you anything and will have the advantage of offering you loans from several banks or insurance companies.

Interest Calculation and Total Cost of Credit

The mortgage interest rate represents the cost of the money borrowed, expressed as a percentage of the principal owed. It is the main component of the total cost of the mortgage. The Swiss mortgage rate offered depends on the borrower’s strength and collateral, as well as the chosen commitment term.

Interest is calculated on the remaining principal due after each payment, according to the formula:

Interest = Principal Due x Annual Rate x (Exact Number of Days / 360)

Example: For a mortgage of CHF 600,000 at a rate of 1.5% over 3 months (90 days):

Interest = 600,000 x 1.5% x (90 / 360) = CHF 2,250

The total cost corresponds to the sum of the interest paid over the entire term of the loan, based on the chosen amortization.

The Different Types of Mortgage Rates

Swiss banks and insurance companies offer a wide range of mortgages with terms tailored to each profile. Here is a brief description of the three most common types of mortgages.

1. Fixed rate: The rate is guaranteed for a fixed term (usually 2 to 10 years) (2, 5, 10 years, or more), with constant monthly payments. The fixed-rate mortgage offers a certain long-term security, but be careful, it does not allow you to benefit from falling rates.
2. Variable rate (SARON): The rate fluctuates according to changes in the money market, with a quarterly adjustment. Very attractive when rates are low, the SARON mortgage obviously carries the risk of rapid rate increases.
3. Combined mortgage: it combines a portion of the loan at a fixed rate with a second portion at a SARON rate.

To choose the most advantageous and secure option, it is essential to receive good advice. A mortgage broker will assess the different scenarios with you and anticipate rate changes.

Monthly Payment Calculation Methodology

Your monthly repayments consist of a portion of interest and a portion of principal amortization. The amortization type determines the amount of your installment:

• Direct Amortization: a portion of the principal is repaid at each installment, in addition to the interest, according to a percentage defined when the loan was signed with the bank or insurance company. The debt thus gradually decreases.
• Indirect Amortization: the borrower only repays the interest and simultaneously funds a third-pillar account, which will be used to repay the principal at the end of the contract. Tax-advantaged but involves a double charge.

The calculation of monthly payments is based on the principle of constant annuities, according to the formula:

Monthly Payment = Capital x Periodic Rate x (1 + Periodic Rate)^n / [(1 + Periodic Rate)^n – 1]

With:

• Periodic Rate = Annual Interest Rate / 12
• n = number of installments (in months)

Example: for a mortgage of CHF 600,000 at 1.5% over 15 years, amortized at 1%:

Monthly Payment = CHF 3,688 (including CHF 750 amortization and CHF 2,938 initial interest)

Our calculator performs this complex calculation in one click and provides you with a complete monthly payment table, including the evolution of the debt.

Optimize your real estate financing

To obtain the best rate conditions and reduce your monthly payments, there are several levers you can use:

• Maximize your down payment beyond the regulatory 20% to reduce the amount and term of the loan. Use your savings, your second pillar (up to 50% of your assets), vested benefits accounts, etc.
• Prepare a solid application with regular income, a stable situation, and additional guarantees (LAP policy, mortgage note) to negotiate the rate. The best profiles earn up to 0.5%.
• Adapt the term to your repayment capacity: the shorter it is, the less interest you’ll pay. But the monthly payments will be higher. Expert advice will help you find the right balance.
• Combine rate types to secure your long-term financing while taking advantage of market opportunities. A mix of short- and long-term variable/fixed rates is often the winning formula.
• Play the competition and systematically compare market offers for each renewal. A difference of a few tenths can make a big difference over 20 years!

To gain more clarity and find the best financing strategy, nothing beats the personalized analysis of a mortgage broker. Their expertise and market knowledge will save you time and money.

Our Mortgage Advisory Services

With years of experience in real estate financing, our team of specialists will support you from start to finish in your purchase project in Switzerland:

• In-depth analysis of your situation and needs
• Detailed simulation of your borrowing capacity and the cost of your loan
• Tailor-made design of your financing plan
• Negotiating the best rate with our banking partners
• Tax optimization thanks to our expert wealth planners

• Our independent and transparent services guarantee you the most advantageous solution on the market, thanks to our network of over 30 lending institutions. We exclusively defend your interests, without conflict with the banks.

  Entrust your real estate project to our mortgage experts: contact us for a free, no-obligation consultation. Together, let’s make your dream of homeownership a reality under the best possible conditions!