Mortgage
How to finance your home
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Affordability Calculator
Quickly check whether a financing setup is affordable based on standard Swiss lending assumptions.
CHF
including 13th salary; bonuses should be counted conservatively
CHF
basis for loan-to-value, maintenance and affordability assessment
CHF
at least 20% of the purchase price, usually at least 10% not from pension funds
Fixed assumptions included: imputed interest rate 5% p.a., maintenance / ancillary costs 0.8% p.a., amortization of the second mortgage down to 66.7% LTV within 15 years.
Result
–Affordability
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0% 33.9% affordable 34–35.9% borderline 36% critical
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Equity–
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How you can afford your dream property
If you want to buy a property, you need at least 20% of the purchase price as equity.
At least 10% of this must come from your own funds, such as savings, gifts, inheritance advances, or accumulated funds from Pillar 3.
At least 10% of this must come from your own funds, such as savings, gifts, inheritance advances, or accumulated funds from Pillar 3.
The remaining equity can also be drawn from occupational pension savings (Pillar 2). The remaining 80% of the purchase price can typically be financed through a mortgage.
How does financing work?
A mortgage is a long-term loan used to finance a property (e.g., house, apartment, land).
There are mainly three types of mortgages common in Switzerland: fixed-rate mortgages, variable-rate mortgages, and SARON mortgages. Each has its own advantages and disadvantages, which should be considered when choosing the right model.
If you buy a home worth 1 million Swiss francs, the mortgage can cover a maximum of 80% of the purchase price, i.e., 800,000 CHF. The remaining 20% must be financed from your own funds.
- Cash and savings accounts
- Funds from Pillar 2 and Pillar 3 pension schemes
- Interest-free loans from family
- Inheritance advances or gifts
- Securities
- Stock investments
Amortization means repaying part of your mortgage within a specified period. There are two types: direct and indirect amortization.
Direct amortization:
Direct amortization:
- You pay a fixed amount regularly — usually quarterly. This reduces both your debt and interest costs.
- The mortgage remains unchanged. Instead, the amortization amount is paid into a tied pension account (e.g., Pillar 3a), which serves as security for the bank. This way, you build up capital that can be used to repay the mortgage later, typically at retirement.
As a guideline, the total monthly costs for your home should not exceed one-third of your gross income. This includes interest, amortization, as well as maintenance and ancillary costs.
Pension Fund as Equity
There are two ways to use your pension fund assets to purchase a home:
Withdrawal
The amount you can withdraw is stated in your pension fund statement. Note: a withdrawal reduces your retirement savings and usually also lowers benefits in case of death or disability. Private insurance can help cover this gap.
Pledging
With pledging, your retirement capital and insurance coverage remain intact — unlike with a withdrawal. However, this may increase the interest burden on your mortgage.
Inheritance Advance / Gift as a Financing Source
It is advisable to document inheritance advances or gifts in writing, specifying whether and to what extent any repayment obligation applies.
Inheritance advance
An additional option to increase your equity is an inheritance advance. In this case, your parents transfer a certain sum of money to you during their lifetime. This amount is credited to you according to legal regulations when the estate is later divided.
Gift
If you receive an inheritance advance from your parents, you must usually account for it in the later estate division, meaning the amount is offset against your inheritance. However, your parents can release you from this repayment obligation. In this case, the gift is not considered in the estate division, provided that the statutory shares of other heirs are not affected.
Amortization Options
When financing your home, the mortgage is usually divided into a first and second mortgage. The second mortgage must be repaid within a specified period — this process is called amortization. Typically, the term is 15 years. There are two main types of amortization:
Direct Amortization
With direct amortization, you regularly repay a portion of your mortgage. This reduces both your debt and interest burden.
Advantages:
Advantages:
- Debt decreases continuously
- Lower long-term interest costs
- Tax deductions for mortgage interest are reduced
- Less financial flexibility for other investments
Indirect Amortization
You transfer the amortization amount to a Pillar 3a retirement account or invest it in a Pillar 3a policy. The capital remains tied until retirement age. Afterwards, you can withdraw the funds and repay the entire second mortgage at once.
Advantages:
Advantages:
- Tax deductions remain for contributions and interest
- Retirement savings remain tax-free
- Greater security in case of disability or death
- Potentially better interest conditions
- Contributions to Pillar 3a can also be deducted from taxes
- You benefit from returns and preferential interest rates on 3a savings
- Mortgage balance remains unchanged
Tip
If the expected return on your retirement savings is higher than your mortgage interest rate (after taxes), indirect amortization can be worthwhile. It is especially useful in times of low interest rates or with a tight budget.
Would you like to find out what works best for you? Get advice, and we will calculate the different scenarios for you.
Would you like to find out what works best for you? Get advice, and we will calculate the different scenarios for you.
The Path to Your Financing with HypoVision
Consultation and Situation Analysis
We review your financial situation and, upon request, prepare a comprehensive financial analysis. This includes tax calculations and potential savings opportunities.
Develop Financing Strategy
Together with you, we create an individual financing strategy, taking into account factors such as term, tranches, amortization, and other aspects.
Property Valuation
We assess your desired property from a banking perspective to best support you in purchase negotiations.
Negotiate and Finalize Offers
Based on the developed strategy, HypoVision reviews offers from over 30 lenders and presents you with the best proposals.
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4052 Basel
info@hypovision.ch
+41 78 338 86 67
© 2026 HypoVision GmbH
All rights reserved.
made by NW DIGITAL
4052 Basel
info@hypovision.ch
+41 78 338 86 67
© 2026 HypoVision GmbH
All rights reserved.
made by NW DIGITAL