Companies have to write off their machines and vehicles annually by a certain percentage after they have been purchased in order to show the depreciation. Properties are treated according to the same principle for the rough estimate of the property value. 1 percent is deducted from the purchase price every year, provided no value-preserving investments have been made.

Examples of additional collateral in connection with a mortgage are funds from the 2nd and 3rd pillars or a securities account or savings accounts. If these are pledged as additional collateral, a higher lending is possible instead of the standard 80 percent.

The required capital is paid out and added to equity. This reduces the amount of the mortgage and the interest burden is lower. The advance withdrawal from retirement assets may only be used for owner-occupied residential property and is possible every 5 years. The capital withdrawn in advance triggers a capital tax, which is paid at a reduced rate and separately from income. The advance withdrawal of retirement assets from the pension fund can result in reductions in pension benefits in the event of old age, death or disability

Affordability provides information about whether you can afford your desired residential property in the long term. In order to calculate the affordability in individual cases, the running costs of the property and your gross income are put in relation to each other. As a rule of thumb, the costs incurred do not amount to more than a third of your gross income. Financial institutions regard your income as an important criterion for whether you can get the mortgage you want and at what interest rate.

Please note our Mortgage calculator. It gives you an initial trend about your financial leeway.

Amortization is the repayment of a mortgage to the mortgage lender. A distinction is made between the voluntary amortization of the 1st mortgage and the obligation to amortize the 2nd mortgage. The 1st mortgage may not exceed two thirds of the market value of a property and does not have to be amortized. The second mortgage, on the other hand, which is taken out if a higher mortgage lending is necessary to finance the property, must be amortized within 15 years or by the age of 65. That can be done directly or indirectly

Direct amortization

With direct amortization, the mortgage is paid back to the bank in regular installments. As a result, the mortgage debt and the amount of interest payments decrease steadily. At the same time, the tax burden increases, as the repayment to the bank means that less high debts and interest can be deducted from taxable assets or income. The main advantage of direct amortization is that the interest costs for the property decrease every year, provided that the mortgage interest rates remain the same or fall. This increases the proportion of freely disposable income – capital that would be suitable, for example, for targeted provision.

Indirect amortization

In contrast to direct amortization, with indirect amortization the mortgage remains the same over the entire term. The payments are not transferred directly to the mortgage account, but are saved indirectly to a pension account or a pillar 3a pension account. At the latest when you reach the age of 65, the capital for the repayment of the second mortgage will be transferred to the bank and this will be amortized.

The advantage of indirect amortization is that the entire mortgage debt can be deducted from taxable assets over the years, as can mortgage interest from taxable income. Contributions up to the statutory maximum amount can be paid into pillar 3a annually. These can also be deducted from taxable income. Real estate owners save twice on amortization. When withdrawing for indirect amortization, the capital saved in pillar 3a is taxed, but separately and at a lower tax rate. In addition, there are no wealth taxes on the pension assets.

The annual financial statements are the arithmetical closing of a commercial business year. It represents the economic success and the financial situation of a company and is the conclusion of the bookkeeping. The annual financial statements compile accounting documents that are checked, confirmed and published. For companies that are obliged to keep double-entry bookkeeping, the balance sheet, profit and loss account and possibly an appendix and a management report are the main components of the annual financial statements.

Small companies that are not required to keep double-entry bookkeeping only need to prepare an income and surplus account for their annual financial statements. This is the basis for future planning and decisions in the company; outsiders can inspect the company’s financial situation via the annual financial statements. The annual financial statements are also the basis of the company’s taxation.

After submitting the tax return, the tax authorities begin with the assessment or tax assessment. Based on the data given in the tax return, the authority determines the taxable income and assets and sets the tax owed.

The tax administration’s decision on the amount of tax owed is communicated in the so-called assessment ruling.

After receipt of the ruling, the taxpayer has 30 days to raise any objection. If the deadline has not expired, the decision becomes legally binding. It is therefore advisable to check the assessment decision as soon as it is received and not to take too much time

A base load is an active obligation that a landowner must fulfill. This service is entered in the land register. A classic example is shoveling snow so that the path can also be passed by third parties.

The bearer note is issued in favor of the respective holder of the note. In contrast to the registered debt letter, it can be transferred simply by handing over ownership.

The benchmark interest rate – also known as the “shop window rate” – describes the mortgage interest rate communicated by an institute for a specific term. Often times, the individual mortgage rate can still be negotiated.

If a property is sold in a bidding process, the highest bidder is usually the winner

A blocked account is an account whose available credit can only be used after a set blocking period has expired. If there is interest income from the credit balance in the account, this is deemed to be taxable income from capital assets, even if the blocking period has not yet expired.

In the mortgage sector, borrowed capital is the financing of a bank, insurance or pension fund in the form of a mortgage. It can make up a maximum of 80 percent of the total amount

Anyone who builds or renovates a building is liable for personal injury and property damage caused by the construction site. This is a causal liability, which means that the policyholder is liable even if there is no fault of his own (water pollution from work or a crack in the neighboring building, etc.). The insurance takes over the compensation of the injured party and the defense of the owner against unjustified claims

If your general contractor (GC) does not pay tradesman’s bills, you have to step in. Even if you have transferred the money to the GC. This is due to the craftsmen’s right of lien, which arises with the conclusion of the contract for work

Craftsmen take risks when they accept orders if the GC does not pay his invoice. The craftsman can insure himself so that work and material are still paid.

The builders’ lien secures wage claims and arises with the conclusion of the work contract. All self-employed craftsmen who do work are therefore entitled to a deposit. Anyone who only supplies material is only entitled if the lien has been created individually or if the material is difficult to utilize. This applies, for example, to doors, ceiling beams or granite slabs, but also fresh concrete that is prepared individually. Anything that is mass-produced, for example bricks, cement, gravel or standard slabs, is not subject to a deposit.

Architects and engineers are not protected by liens. The law restricts the right to protection to craftsmen and entrepreneurs who regularly work on the basis of contracts for work and services.

The property owner can avert the builder pledge if he pays the craftsman’s claim or provides security, for example with a bank guarantee. There is no protection against the lien. However, the craftsman or entrepreneur must take action on his own initiative and take care of the entry in the land register, which must be recognized by the landowner or a court. Since hardly any landowner will voluntarily agree to this, the craftsman usually has to obtain a preliminary entry of the lien in court.

Tips and Tricks

When building a house

• Pay all craftsmen directly and not through the general contractor.
• Ask the general contractor or handyman to show that they have paid their subcontractors before transferring money to them.
• Request a bank or insurance guarantee from the general contractor. Then the surety has to pay for the builder’s lien.

When buying a house

• Check the excerpt from the land register carefully and check whether there are any claims that could lead to the entry of a builder’s lien. The craftsman’s claim arises when the work contract is concluded and expires four months after the work has been completed.

Building insurance is an insurance policy designed to protect the permanent buildings, outbuildings and garages specified in the insurance contract. It is a property insurance. In principle, only buildings intended for residential use and not used for commercial purposes are insured. In the case of mixed use, we recommend the expressly additionally agreed inclusion of the commercially or freelance rooms.

It is a fire and natural hazard insurance. The insurance covers damage caused by fire, lightning, explosion, smoke (sudden and accidental, but not gradual effects), flood, flood, storm, hail, avalanche, snow pressure, rock fall, rock fall, landslide, crashing aircraft or parts thereof.

As a rule, the cantons are responsible. That is why competition between providers is also restricted.

Even if the conclusion is not compulsory in all cantons, such insurance protection makes sense for all property owners. Damage caused by water or fire can severely reduce the value of the property. A total write-off would even be possible, which nobody would take over. As a rule, financial institutions do not finance real estate without building insurance.

In addition to cantonal building insurance, owners can cover other risks with supplementary insurance. Earthquakes are not covered by building insurance, although Switzerland is a seismically active area with regularly recurring smaller earthquakes.

If a landowner grants a person a temporary right to build on or under his land, then there is a right to build. During this time, the landowner refrains from using it himself and generally receives building lease interest for it.

A building right must be entered in the land register as a permanent and independent easement Art. 779 ZGB so that the third party property right to the building becomes legally effective.

A building right is independent if it is granted in favor of a specific person, who in turn can sell, give away and bequeath the building right himself. The building right can also be encumbered with a mortgage through the entry in the land register. A building right is permanent if it is established for at least 30 years. The maximum duration of a building permit, however, is by law 100 years. In the building right contract, the content and scope of the building right (location, shape, extent and purpose of the buildings) as well as the use of the non-built-up areas are bindingly regulated between the building right issuer and the building right holder. The same also applies to the building lease interest and other contractual provisions, provided these are publicly notarized and noted in the land register. Interest is regularly agreed for the granting of building rights. This debt is of a personal nature on the part of the person entitled to build. If the building right interest is noted in the land register, the debt obligation is automatically transferred to any purchaser of the building right property.

The building right interest is taken into account when calculating the affordability.

With building liability insurance, you insure yourself against the consequences of damage to third parties on your property.

Examples:

Snowfall, rain and the subsequent cold have turned the forecourt into an ice rink. Unfortunately, the access to the house was not cleared of snow or salted. This is how it happens: the postman slips on the way to the front door and injures himself. A case for building liability insurance.

A car is parked right in front of your apartment building. As a result of a lack of construction or poor maintenance, a tile falls from the roof and lands on the car. The damage is considerable and is covered by building liability insurance.

One plot is lined with trees. What is wonderful to look at can easily turn into a loss. Sometimes you don’t even need a storm, a strong gust of wind at the wrong moment is enough and a tree falls over. And this can also cause great damage on the neighboring property. In this case, too, you are optimally protected with building liability insurance.

The Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG) came into force on 01.01.1985. The BVG defines the minimum requirements for occupational benefits that every pension fund in Switzerland must meet for its insured persons.

The cadastral plan is used by financial institutions to assess the overall situation of a property. The boundaries of the parcels are entered on it.

A cap is an upper limit negotiated between the debtor and the creditor for liabilities with variable interest rates (special hyp. Products). However, the one with interest rate hedging is often relatively expensive and is therefore usually only worthwhile for more extensive financing.

When a property is transferred from one owner to another, this is known as a change of hand.

Condominium ownership refers to a clearly defined living area within a block of flats. It is based on joint ownership of the entire property. The entire block of flats belongs to the condominium owners’ association.

Anyone who buys condominiums automatically becomes part of the condominium community. The task of this community is to administer the common parts. For this purpose, provisions are regularly paid into so-called renewal funds.

A construction loan is managed in the form of a current account during the construction phase. When the construction work is completed, the current account will be transferred to a mortgage. This is known as consolidation

Construction insurance covers damage (damage or destruction) that occurs to objects under construction as a result of a construction accident. The theft of objects that are already connected to the property under construction is also insured

A building loan is required to finance a building project or to renovate an existing property. It is only used for temporary financing and will be converted into a mortgage after the work is completed. The financial partner sets a maximum limit, which corresponds to the amount of the building loan limit. If a new building is planned, the building loan may only be used when the owner’s own funds have been used up.

The year of construction is of great importance for the appraisal of properties due to the depreciation of age. The completion of the building is taken as the key date. The year of construction can usually be found on the building insurance card.

In Switzerland, construction may only be carried out within building zones. Building zones are areas that may be built on in accordance with municipal building and usage regulations. Their area is determined by the zone plan. Outside the construction zone, only agricultural and site-specific buildings are permitted in Switzerland. The first stage of the revision of the Spatial Planning Act (RPG 1) came into force on May 1st, 2014. Since then, the building zone moratorium set out in the transitional provisions of the RPG has contributed to the fact that hardly any new building zones have been created. The building zone statistics are collected anew every 5 years.

All paper mortgage notes that were drawn up before January 1, 2012 can be converted into register mortgage notes by joint written application by the owner (debtor) and the obligee

Forms of ownership

Are you buying the property alone? Or together with your wife or partner? In the purchase contract at the latest, you must state whether you are buying the house alone or in co-ownership and how much you and your partner are involved in. This information is recorded in the land register. The most common ways to buy a home are:

Sole ownership: You alone bring the equity. You can freely dispose of the property, but you are also solely responsible for maintenance, damage and payment of interest to the bank.
Joint ownership: In this form of ownership, the owners are jointly owners either through a contract (e.g. through a marriage contract or a simple partnership) or through a legal provision (usually through a community of heirs) – regardless of who has invested how much money in the property. What counts is the superordinate relationship, for example the marriage contract. The ratio determines who is involved in the property and to what extent. In the case of joint ownership, the partners cannot freely dispose of their shares: decisions, for example regarding the sale of the property, must be made jointly.
Joint ownership: You share ownership with one or more people. The so-called co-ownership shares are recorded in the land register, which are usually based on the contributions of those involved. Everyone can freely dispose of their share, but also has the duties of an owner. If someone wants to sell his share, the other co-owners have a statutory right of first refusal. Decisions are made according to the majority principle. Condominium ownership is a form of co-ownership for which the law lays down detailed rules.

Estimation of the construction costs based on the planning as well as possible guideline offers from entrepreneurs, craftsmen and other construction partners. A seriously calculated cost estimate should generally not exceed 10% of the investment costs.

The creditworthiness  stands for the ability of a mortgage borrower to be able to repay the loan to the mortgage lender. To calculate the creditworthiness, the financial institution checks, among other things, the relationship between your expenses and income and whether you have already been operated

To evaluate your property, it is important to determine the gross volume (cubature). The term cubature (cube) comes from the Greek and means cube. The cubature is calculated without taking the construction quality into account. The calculation takes place in two steps:

1. basic volume of the building

This volume is calculated from the building floor area multiplied by the height. The usual height per floor is 2.60 m.

2. roof surcharges

Instead of taking the usual storey height into account, surcharges for expanded or undeveloped roofs (e.g. cold screed) can be used. For expanded roofs, the roof surcharge is 2.60 m (usual storey height). The roof surcharge is only 1 m for roofs that have not been developed.

A plot of land is developed if it is sufficiently accessible for the buildings intended for it, if these can be supplied with sufficient water and energy, if the proper disposal of sewage and other waste materials is guaranteed.

With direct amortization, the mortgage is paid back to the bank in regular installments. As a result, the mortgage debt and the amount of interest payments decrease steadily. At the same time, the tax burden rises, as the repayment to the bank means that less high debts and interest can be deducted from taxable assets or income. The main advantage of direct amortization is that the interest costs for the property decrease every year, provided that the mortgage interest rates remain the same or fall. This increases the proportion of freely disposable income – capital that would be suitable, for example, for targeted provision.

The earnings value of a property reflects the calculated price of a property on the basis of the achievable rental income. In addition to the rental income, the value is based on a capitalization rate that depends on the interest rate level and individual surcharges and discounts

The early repayment penalty is the penalty interest a borrower has to pay if they want to cancel a mortgage before the end of the regular term

Easements are conditions that you as the owner must endure. A typical example is the right of residence, which entitles a third person to live in your property. All easements can be seen on the extract from the land register.

The mortgage note is established in two stages:

1. Conclusion of the pledge agreement. In most cases, this contract is drawn up by the bank and sent to the notary’s office. In a second step, the contract is publicly notarized.
   After the notarization has taken place, the landowner must submit the written registration to the land registry for the entry of the real estate lien.
2. The land registry then sends the bank the so-called interim certificate. The interim deed is the confirmation of the registration of the mortgage note for entry in the land register. The bank usually approves the loan based on this document.

The fees for setting up new mortgage notes vary from 0.1 to 0.3 percent of the amount of the mortgage note. In Bern and Zurich they are the same at 0.25 percent. For example, if the buyer has a mortgage note for 800,000 francs, because his financial institution is mortgaging 80 percent (of 1 million francs) on the house:

2000 francs for the buyer in the canton of Bern and the canton of Zurich.

Copy of the entries in the debt enforcement register. Available from the debt enforcement office.

The regular costs for a property after the purchase consist of 2, with a 2nd mortgage of 3, cost centers: mortgage interest, mandatory amortization for a 2nd mortgage, as well as maintenance and ancillary costs. Maintenance and ancillary costs in particular are often neglected or underestimated.

As a rule of thumb, 1.00% of the property value should be set aside annually for maintenance and ancillary costs. If you also act with foresight at the right moment, you can also save money.

Additional costs or maintenance costs? That is the difference:

Ancillary costs mean costs for water, electricity, heating or house maintenance. Maintenance costs are called expenses for the maintenance of the property. This includes, on the one hand, simple work such as painting walls or replacing floor coverings. On the other hand, it also includes large budget items such as the renewal of the kitchen, the sanitary installations or repair work on the facade.

Of the 1.00% of the property value that should be put aside, 0.60% is calculated for ancillary costs and an average of 0.40% for maintenance costs.

Some financial institutions offer family mortgages with reduced interest rates over a certain period of time, e.g. over 3 years. So it’s a welcome bonus. The discount is usually only granted on the first mortgage.

If you want to buy a house or an apartment, the seller usually asks for a confirmation of financing before concluding the contract. A financial institution will confirm in writing that it will support you in financing your dream property with a mortgage. The financing confirmation gives the seller the assurance that you are actually able to finance the property.

The first mortgage goes up to 2/3 of the market value of the property for owner-occupied living. In principle, it has no maturity limit and, unlike the second mortgage, does not have to be repaid after a certain number of years. Whether you leave the 1st mortgage behind or continue to amortize it depends on your income, your living conditions, tax considerations and your investment alternatives.

The fixed-rate mortgage is one of three common mortgage models. It has a fixed interest rate that is fixed for a term of between 2 and 15 years.

The interest rate for fixed-rate mortgages is stable for the entire term regardless of market developments.

There are two types of fixed-term loans in real estate finance:

Fixed-rate mortgage
Saron mortgage (also money market mortgage)

Flex mortgage is an umbrella term for money market mortgages. This can be an ex-LIBOR or a SARON mortgage.

If a mortgage contract expires, follow-up financing, i. H. the extension of the mortgage is necessary. Around 18 to 24 months before the end of the term of the current mortgage contract, you should think about replacing the mortgage. These questions should be answered for this:

• Would you like to make a one-off amortization or are renovations and conversions coming up soon?
• What loan amount do you need in the future?
• With which product (fixed-rate, Saron or variable mortgage) would you like to replace your mortgage?
• Which running times suit your needs and your life situation?

Call us or write an e-mail. We are always there for you and can obtain several offers for the extension of your mortgage.

Foreign loans refer to a loan that is provided by a third party.

Sole ownership
This form of ownership is preferable if only one person contributes the equity. This person can freely dispose of the object. It is therefore solely responsible for the maintenance and payment of the costs (interest and amortization).
Co-ownership
If several people share the property and each has their own funds, this form of ownership is preferred. The co-ownership shares are recorded in the land register (e.g. 1/3 or 2/3), depending on how much equity each person has contributed. Everyone can freely dispose of their share and must accordingly also pay part of the costs (maintenance, interest, etc.). If one owner wants to sell his share, the other co-owners have a right of first refusal. This means that the co-owners can buy this stake first.
Joint ownership
With this form of ownership, all parties jointly own the property, regardless of how much equity which person has contributed. This form of ownership is common if there is a marriage contract or a community of heirs. In the case of joint ownership, the parties cannot freely dispose of their shares. In addition, all decisions (e.g. the sale of the property) must be made jointly. The costs (e.g. maintenance, interest) must also be paid jointly.

“Self-used” or “owner occupied” means that the property is inhabited by  yourself. “External use” means that the property is being used by a third party.

If you can extend or replace your mortgage before the due date, you can do so up to 18 months in advance thanks to a forward mortgage. For early hedging, you pay a surcharge known as the forward rate. The amount of this rate is based on the time of fixing and the chosen term.

Surcharge that is due when taking out a forward mortgage.

The general contractor undertakes to complete a contractually agreed structure. With the general contractor, the client has a contractual partner who is responsible for the construction of the building according to the client’s plans. The general contractor can delegate individual services of the contract to third parties (subcontractors).

When applying German interest rate custom, the interest rate is given for a calendar year, regardless of whether this has 365 or 366 days. See also international interest rate practice

The gross floor area denotes the sum of all floor areas above and below ground including the wall and wall cross-sections.

The gross living area includes all areas within the apartment (living rooms, ancillary rooms, corridors, stairs) plus the external wall cross-sections. However, it does not include external areas such as stairwells, terraces and open balconies as well as non-habitable basement and attic rooms

Rental income and ancillary costs together form the gross rental income of an investment property.

In the case of marginal financing, the borrower can bring in a surety as cover. This is a private or legal person who steps in for the borrower in the event of default in payment or default.

In order to reduce the risk of loan defaults, the federal government has defined a minimum share of 10 percent in hard equity. This is understood to be assets to be contributed that do not come from the occupational pension scheme. See details under own funds

The hedonic method assumes that the market price of a property being traded “conceals” information about the evaluation of the individual properties that determine its value.

Using suitable statistical methods, it is possible to record, weight and compare these individual factors, which are valued differently by the buyers, in order to arrive at an overall value.

On the basis of some properties such as macro-location (belonging to a region, attractiveness of the community, accessibility to the nearest economic center, etc.), micro-location (distances to public transport, visibility, sun exposure, immissions, etc.), quantitative property information (floor plan size, volume, usable area, number of rooms etc.), qualitative property information (year of construction, condition, standard, etc.) a property can be described sufficiently well. These “implicit prices” of the property properties can be measured in market equilibrium (traded objects) in order to then make a prediction of the market values ​​of other objects with different qualities by means of the statistical estimation of these prices.

The hedonic valuation is a statistically based comparison value method. The main advantage lies in the low costs, but the estimation accuracy can be within a range of +/- 20%.

Anyone wishing to purchase a holiday property is confronted with other financing regulations. More equity is required and the maximum loan-to-value ratio is between 60% and 70%. In addition, it is not possible to finance a vacation home with money from the 2nd or 3rd pillar.

The contents insurance protects against damage caused by fire, tap water, storm / hail as well as burglary, robbery and vandalism after a break-in and can be supplemented individually. It is not compulsory in Switzerland, but strongly advisable

The imputed interest rate is used when lending to calculate the affordability in order to guarantee the customer’s financing even in future periods of high interest rates.

Anyone who lives in owner-occupied property pays tax on the so-called imputed rental value as income. However, this income has not actually been realized and is derived from the theoretically achievable rental value of the property. Expressed in francs, the imputed rental value corresponds to around 60 to 70 percent of the amount that a tenant would have to pay for the residential property per year. The calculation is based on the market rent that could be achieved if the property were rented out. The cantons define what percentage of the market rent determined by the municipality must be taxed as imputed rental value.

The imputed rental value is always the subject of public discussions. The abolition has been considered several times, along with the abolition of the fact that mortgage interest can be deducted from income.

Income producing real estates are residential, commercial or commercial buildings that the owner (investor) does not use himself, but rents out in order to generate a return. From 2020, stricter financing guidelines for investment properties will apply: the equity component for financing investment properties will now be at least 25 percent (previously 10 percent) of the purchase price. In addition, the mortgage debt must be reduced (amortized) to two thirds of the lending value within a maximum of ten years (previously 15 years)

In contrast to direct amortization, with indirect amortization the mortgage remains the same over the entire term. The payments are not transferred directly to the mortgage account, but are saved indirectly to a pension account or a pillar 3a pension account. At the latest when you reach the age of 65, the capital for the repayment of the second mortgage will be transferred to the bank and this will be amortized.

The advantage of indirect amortization is that the entire mortgage debt can be deducted from taxable assets over the years, as can mortgage interest from taxable income. Contributions up to the statutory maximum amount can be paid into pillar 3a annually. These can also be deducted from taxable income. Real estate owners save twice on amortization. When withdrawing for indirect amortization, the capital saved in pillar 3a is taxed, but separately and at a lower tax rate. In addition, there are no wealth taxes on the pension assets

In contrast to the percentage interest rate, the interest costs are the actual costs in Swiss francs that have to be paid for borrowed capital, e.g. a mortgage for real estate financing

The interest rate is the percentage price that must be paid on borrowed capital. On a mortgage, this is the mortgage rate. In the case of a fixed-rate mortgage, the mortgage interest rate remains the same for the entire term, but in the case of money market mortgages, the interest rate continuously adapts to the market situation

When applying international interest rate custom, the interest rate is given for 360 days. In the case of a calendar year (not a leap year), however, 365 days are charged as interest costs. For the interest costs per year, the interest rate is then multiplied by the factor 365/360 = 1.01389. See also German interest usage

Anyone who acquires an existing property has to pay a purchase price. This corresponds to the investment costs. The same applies to the construction of a new house – there the total of all expenses for the construction of the property corresponds to the investment costs.

An irrevocable promise to pay ensures that the respective financial institution transfers the purchase amount to the seller at the contractually agreed time. The irrevocable promise to pay must be available to the notary or the land registry administrator and handed over to the seller at the latest at the time of signature – but at best before this.

If you have agreed a joint and several debt partnership, the mortgage lender can hold each debtor responsible for the entire claim. Overall, however, the claim may not exceed the total amount of the outstanding sum. Nevertheless, it is important to understand that as a joint and several debtor you are not only liable up to half, but for the entire amount.

Forms of ownership

Are you buying the property alone? Or together with your wife or partner? In the purchase contract at the latest, you must state whether you are buying the house alone or in co-ownership and how much you and your partner are involved in. This information is recorded in the land register. The most common ways to buy a home are:

Sole ownership: You alone bring the equity. You can freely dispose of the property, but you are also solely responsible for maintenance, damage and payment of interest to the bank.
Joint ownership: In this form of ownership, the owners are jointly owners either through a contract (e.g. through a marriage contract or a simple partnership) or through a legal provision (usually through a community of heirs) – regardless of who has invested how much money in the property. What counts is the superordinate relationship, for example the marriage contract. The ratio determines who is involved in the property and to what extent. In the case of joint ownership, the partners cannot freely dispose of their shares: decisions, for example regarding the sale of the property, must be made jointly.
Joint ownership: You share ownership with one or more people. The so-called co-ownership shares are recorded in the land register, which are usually based on the contributions of those involved. Everyone can freely dispose of their share, but also has the duties of an owner. If someone wants to sell his share, the other co-owners have a statutory right of first refusal. Decisions are made according to the majority principle. Condominium ownership is a form of co-ownership for which the law lays down detailed rules.

All properties and their owners are entered in the land register. It is a public registry at the district level. In addition to the ownership structure, basic charges and rights are noted.

The costs for the land register and the notary costs are regulated by the cost regulations. The business value of the property is always the starting point for the calculation. The amount of the fee is calculated according to the underlying process. A notary fee is due for the establishment of a land charge in an enforceable form and for the notarization. A quarter of the land registry costs will be offset for the cancellation approval and the assignment of a land charge. The notary and land registry fees are not based on fixed amounts. They always depend on the amount of the purchase price. If you want to calculate the land registry costs in advance, you can do very well with an average value. The land registry costs as well as the notary costs are usually around 1.5% – 2.5% of the purchase price. They consist of 1% – 1.5% notary fees and 0.5% -1% land registry costs. This means that if a property is purchased for a purchase price of CHF 500,000, then it can be assumed that the total costs can amount to around CHF 10,000. A comparison should be made between the different notaries.

Who pays the land registry costs in Switzerland?

Land register costs are incurred with the entry in the land register. As a rule, they are in the percentage range of the respective sales price. The costs are calculated differently depending on the canton. The fee rate depends on the purchase price of the property. The land registry costs are typically shared between the buyer and seller. In many cases there are additional costs, such as the preparation of a mortgage note.

All details about the respective property are visible on the land register extract: ownership structure, basic charges and rights as well as easements to be tolerated. It should not be older than 6 months for a financing request.

Loan-to-value ratio refers to the loan in relation to the purchase price.

Loan is the money that you can raise yourself for financing. This money can basically come from your own account, from the sale of securities, an advance withdrawal, from private loans or from withdrawing funds from the pension fund or pillar 3a.

The loan-to-value ratio results from the comparison of loan and purchase price. In principle, financial institutions require that at least 20 percent of the purchase price can be contributed by yourself. This means that the mortgage lending to the property is a maximum of 80%.

Due to the Finma resolution (press release of 1.6.2012), at least 10% of the purchase price (i.e. half of the total required equity) must be available in the form of cash or pillar 3a credit for mortgage financing. These so-called “real own funds” can be drawn from the following sources:

• savings
• securities
• advance inheritance
• private loan
• own work
• building land

An additional 10% can be pledged or withdrawn from the pension fund for owner-occupied residential property.

Loss of earnings insurance (also called disability or occupational disability insurance) takes over if you are unable to work due to an accident and / or illness. It is paid out in the form of a regular pension and helps to maintain the current standard of living and to prevent debt. The amount of the pension depends on the degree of incapacity and is paid out from a disability of 25 percent.

The lowest value principle is used by mortgage lenders when calculating the mortgage amount; if the market value and purchase price of a property are not the same, the lower value is used as the basis for calculation.

Which factors define a luxury property?

Examples of criteria that many providers use to determine a luxury property:

• Living space in a condominium: over 200m2
• Living space in a single family home: Over 300m2
• Property value higher than CHF 2.5 million
• In relation to the property’s surroundings: A property that surpasses the other properties in the vicinity in a certain way (e.g. above-average property size, upscale furnishings with noble fittings, excellent architecture, etc.)
• In relation to the region: A property that is considered a luxury property in a rural community in the Jura does not necessarily qualify as a luxury property on the right bank of Lake Zurich.

What is special about the financing of luxury properties?

The big difference to normal financing lies in the lending: While the upper lending limit is usually 80 percent, it is usually only 50 to 60 percent for luxury properties. This means that someone who wants to purchase a luxury property will need proportionally more equity.

The regular costs for a property after the purchase consist of 2, with a 2nd mortgage of 3, cost centers: mortgage interest, mandatory amortization for a 2nd mortgage, as well as maintenance and ancillary costs. Maintenance and ancillary costs in particular are often neglected or underestimated.

As a rule of thumb, 1.00% of the property value should be set aside annually for maintenance and ancillary costs. If you also act with foresight at the right moment, you can also save money.

Additional costs or maintenance costs? That is the difference:

Additional costs are the costs of water, electricity, heating, insurance or house maintenance. Maintenance costs are called expenses for the maintenance of the property. This includes, on the one hand, simple work such as painting walls or replacing floor coverings. On the other hand, it also includes large budget items such as the renewal of the kitchen, the sanitary installations or repair work on the facade.

Of the 1.00% of the property value that should be put aside, 0.60% is calculated for ancillary costs and an average of 0.40% for maintenance costs.

The marginal tax rate indicates how the tax burden changes if the taxable object increases or decreases by one unit.

In Switzerland, the marginal tax rate is mainly used in connection with the tax object “income” – that is, in the context of income taxes. It is a key metric when it comes to tax considerations and potential tax savings related to income taxes. It is often given per 100 or 1000 francs.

Example 1: A person has a taxable income of 100,000 francs before a wage increase and has to pay income tax of 20,000 francs. After the wage increase, the person has a taxable income of 101,000 francs and has to pay taxes in the amount of 20,300 francs. The person has to pay CHF 300 in taxes for the additional CHF 1,000. In this case, 30% of the additional income is taxable; only 70% of the original wage increase remains net. The marginal tax rate is 30% in the income interval between 100,000 and 101,000 francs.

Example 2: A person has a taxable income of 105,000 francs and pays taxes of 22,000 francs on it. A payment of 5,000 francs into pillar 3a reduces the taxable income to 100,000 francs. After the 3a deposit, you only have to pay 20,000 income taxes. By reducing taxable income by CHF 5,000, the person has to pay CHF 2,000 less in taxes. In this case, the marginal tax rate is 40% for the interval between CHF 100,000 and CHF 105,000.

Put simply: if the marginal tax rate is 35% – a reduction in taxable income by CHF 1,000 results in tax savings of CHF 350.

The market value represents the market value.

There are three methods for calculating the market value:

1. Real value method (also called replacement value method): This calculates how much a buyer would have to pay today for the corresponding floor and the construction of the building.
2. Hedonic method: Computer-aided estimation models are used here, which are based on the purchase prices actually paid for similar properties in the region.
3. Earned value method: This is only used for investment properties; here the expected rental income is the determining factor.

The determination of the market value of a property by an expert is known as a market value estimate

Minergie is a sustainable construction method, which leads to lower the energy demand of a building and to increase the living quality of the residents

With a mixed mortgage, you combine different mortgage models. For example, you can take out part of your mortgage as a fixed-rate mortgage and a second part as a Libor mortgage. Important: As a rule, the minimum per tranche is CHF 100,000. With a mixed mortgage, the customer has the opportunity to benefit from the advantages of the various models and to distribute their disadvantages.

Details under Saron Mortgage

Loans that are used to finance houses and apartments are known as mortgages. Since a mortgage note is deposited as a pledge, mortgages are very safe.

The mortgage note serves as security for a mortgage. With him mortgage claims can be asserted. Thanks to the mortgage note, the bank has the right to dispose of the property in an emergency. See also paper mortgage note or register mortgage note.

The mortgage becomes interest like any other loan. It also depends on the current interest rate level and, depending on the model, can be fixed over several years. It is paid quarterly or semi-annually, depending on the mortgage model and financial institution.

Multi-family houses are rented out to a certain extent or are also inhabited by oneself. Their primary purpose for the buyer is to generate a return. If there are three or more apartments, we speak of an apartment building

The net living area includes the habitable area of all interior rooms including stairs, hallways, corridors, etc.

The net rental income is understood to mean the rental income without the additional costs

A new mortgage is the process of taking out a mortgage when buying a property. This is in contrast to follow-up financing, which is taken out when an existing mortgage expires.

The official value of a property forms the basis for calculating property and property tax. It is determined by the cantonal tax administrations according to a specific point system. It is the only property value that is entered in the land register.

The purchase of a property can be financed with various means. The decisive question is: personal use or rental? Holiday home or primary residence? Depending on the type of use of the property, the requirements and provisions regarding own funds vary

Owner-occupied housing

People who want to live in their property themselves are very free to choose their own funds. In addition to the usual own funds, capital from the 2nd and 3rd pillars can also be withdrawn or pledged. Often this is the only way to raise the required 20% equity. This way of raising own funds is therefore well accepted by financial institutions.

Vacation properties

Anyone wishing to purchase a holiday property is confronted with other financing regulations. More equity is required and the maximum loan-to-value ratio is between 60% and 70%. In addition, it is not possible to finance a vacation home with money from the 2nd or 3rd pillar.

Income properties

Lending principles similar to those for owner-occupied residential property apply to properties that are to be rented out. Commercial properties and properties with a high proportion of commercial space are an exception. Increased capital adequacy requirements apply to these. It can happen that the bank finances a commercial property only 50%.

What can I do if my own resources or income are scarce:

Check whether you can increase your own funds in the following ways:

interest-free loan from third parties with no repayment obligation
Donation
Advance withdrawal
guarantee
Pledging of assets

In any case, you have to contribute at least 10% of the purchase price to the financing as cash or account credit yourself.

When choosing the right equity capital, it is important to note that individual financing options are riskier than others. Here you can find out more about the advantages and disadvantages of each financing option.

Account and securities balances

Account and securities balances are usually not a problem. They can be used for the acquisition of real estate without restriction and without risk. However, you should never invest all of your savings in real estate. It pays to hold back reserves. Because buying an existing property can result in higher renovation costs than expected. Important when pledging securities: price fluctuations can be dangerous if they cause severe losses in value. Because in such a case it is possible that the securities account has to be closed and liquidated so that the bank has sufficient security again. This can have unpleasant consequences for the mortgage borrower.

Pillar 3a account

Money from pillar 3a is primarily used for old-age provision. However, it may be used to finance owner-occupied residential property. Please note: A withdrawal of this money worsens the borrower’s pension situation. The money cannot be used when you retire because it has already been invested in home ownership.

Pension fund assets

A withdrawal or pledge of funds from the 2nd pillar must also be well thought out. Many are unaware that drawing funds from pension funds does not only affect retirement provision. Anyone who draws capital from the 2nd pillar for the purchase of residential property also worsens their financial security in the event of disability or death.

Insurance policy

Homeownership can also be financed with insurance policies. For example by mortgaging them. Most financial institutions see no problems with insurance policies with guaranteed capital. However, it becomes difficult when there is no guaranteed payout. As with securities accounts, the following applies here too: Beware of price fluctuations and the possible consequences.

Donation and advance withdrawal

For many, it is only a gift or an advance withdrawal that enables them to buy their own property. However, if the amount provided is particularly high or exceeds the quota that is not protected by the compulsory portion, caution is required. Because if the person who gave you the money dies, claims can arise from the other heirs. This can create problems for the borrower. In the best case scenario, he can cover the claims of the other heirs from his own savings or by increasing the mortgage. If he has no savings and the mortgage lending to the property is already high, the only way out is often the sale of the property. If you want to finance your own home with money from a gift or an advance withdrawal, you should therefore have all the points checked by a specialist. For example from a lawyer specializing in inheritance law.

loan

Anyone who takes out a loan to finance their own property must know: Unless otherwise agreed, k

Normally, financial institutions finance up to 80% of a property with a mortgage, but a lending of over 80% is also possible if additional collateral in the form of credits from the 2nd or 3rd pillar is pledged

If you have enough manual skills, you can contribute to the construction or renovation work yourself. This own contribution can be added to a certain proportion of the own funds, provided that it is assessed in line with the market and all material costs have been recorded. However, the financial institutions are very restrictive when it comes to crediting such personal contributions because their value is difficult to assess.

In the case of paper mortgage notes, a mortgage title (deed) is issued in addition to the entry in the land register. This mortgage is a marketable security that is issued either in the name of the holder (= bearer debt certificate) or in the name of a person (= registered debt certificate). The mortgage note is drawn up at the responsible land registry. The land registry administrator issues the mortgage title and signs it. Last but not least, the mortgage certificate is entered in the land register. The certificate is more than just a document. Think of it as having a part of the land register floating around. The lien on the property can only be changed or deleted if the mortgage note is submitted to the land registry. If the mortgage note has been lost, it must be declared invalid by the court. If a redeemed paper mortgage note is not deleted, it must be kept in a safe place. Ideally in a place where the owner and, if necessary, his heirs can find him again.

Pension funds are funds from the compulsory occupational pension in the pension fund or in the vested benefits account (2nd pillar), as well as funds from voluntary tied pension provision in a pension policy or in the pension account (pillar 3a). Often people also talk about retirement savings.

Basically, the payments from the 2nd pillar or the 3rd pillar are regulated in the same way, with a few small differences. With the following explanations we would like to show the basics of advance withdrawals and pledges, as well as the similarities and differences between the various pension providers

The second pillar is the occupational pension plan. For those who are employed, this is the pension fund, for those who are not gainfully employed, it is the vested benefits account.

Pillar 3a: tied pension provision

Pillar 3a is called tied pension provision because it is primarily used for old-age provision and is therefore tax-subsidized by the federal government. Payments into pillar 3a are only possible up to the specified maximum contribution and can be deducted from taxable income annually.

All employed persons with an income subject to AHV who live in Switzerland

Pillar 3b: unrestricted provision

Pillar 3b is called free provision because it allows more freedom and can cover other needs in addition to pillar 3a. There are no maximum annual contributions in pillar 3b. However, the contributions cannot be deducted from taxes. The credit must be taxed as assets. The payout, on the other hand, is tax-free and the time can be freely selected.

All persons regardless of occupation and place of residence

Deduction as part of the flat-rate deductions for insurance premiums

By pledging (depositing) additional collateral, a borrower can improve his creditworthiness and thus possibly receive more interesting conditions and a higher mortgage with lower amortization

The pledged capital serves as security for the bank. The money remains tied up and is only used if the debtor is insolvent (realizing the pledge). Since there is no payout, there are no taxes. When pledging pension funds, the bank has the option of offering more favorable terms or of increasing the mortgage amount

The property area comprises the portion of the property (the parcel) that is defined as building land in the zoning ordinance. It is entered in the land register and can be seen on the mortgage note.

A plot of land is an area of land that comprises an entire parcel that is entered in the land register

The portfolio mortgage is a special UBS model. Features are the unlimited term and the quarterly interest rate adjustment

Following the financing commitment, the buyer receives a promise to pay from the financing bank, which he must hand over to the notary in order to draw up the purchase contract.

The tax authorities cut a piece of the profit from the sale of a property. The shorter the period of ownership, the higher the property gains tax. If you sell your own home and buy a new one within a certain period of time, you may not have to pay tax on the profit immediately.

The amount of property gains tax depends on the length of ownership. In most cantons, the tax rates are also progressive. The shorter the period between buying and selling the property and the higher the profit, the higher the tax in relation to the profit.

The profit corresponds to the difference between the buying and selling price. Value-adding investments can be deducted from this, but also, for example, broker commissions, advertising costs, property transfer taxes, notary fees and, if necessary, the early repayment penalty to the bank if a mortgage has to be terminated prematurely as a result of the property sale.

In the canton of Zurich, for example, a taxable profit of 500,000 francs is taxed at almost 190,000 francs if the property is owned for only 2 years. After 10 years, around 152,000 francs are due, after 20 years just under 95,000 francs in taxes

When the tax will be deferred

In certain cases, property gains tax is not due immediately, but rather deferred. This includes, for example, a change of ownership in the event of an inheritance, a gift or an advance withdrawal. Tax is also deferred in the event of changes of hands between spouses that are related to property law (e.g. change of property regime) or in the event of separation or divorce.

But postponed is not canceled: If you later sell the property to a third party, you have to pay the postponed property gains tax – on the difference to the original purchase price, not the takeover price. However, the period of ownership of the previous owner will be taken into account.

Property gains tax is also deferred for properties used by the owner if the sales proceeds are invested in a new home in Switzerland “within a reasonable period” (so-called replacement purchase). Depending on the canton, a maximum of two to four years may elapse between the sale of the old and the purchase of the new property.

Anyone who has bought a new home usually has to sell their old one within one to two years so that the tax is deferred. As an exception, the tax authorities extend the deadline – for example, if health or professional reasons make it necessary to move immediately, or if the building permit is delayed.

On the other hand, those who postpone sales only because they expect prices to rise have no right to postponement. A tax deferral is also excluded for second homes and holiday homes as well as for rented properties. In the case of partially rented apartment buildings, the deferral only applies to the part of the property that is inhabited by the owner.

The tax deferral only applies to the part of the profit that is invested in the replacement property. If the purchase price of the new property is lower than the investment costs of the old property, the entire profit must be taxed immediately (see case 3 in the graphic below). This is often the case when the house is exchanged for a condominium that is significantly cheaper.

The tax base of the property is taxable as an asset. However, the mortgage can be deducted from taxable assets.

As a rule, the net asset tax value is calculated as follows:

Single-family houses: land value + time construction value

Condominiums: land value share + time construction value share

The land value is based on the corresponding category of the building land. The current building value corresponds to the new building value minus the age depreciation corresponding to the age of the building.

The validity of a purchase agreement for real estate requires a qualified written form, public notarization. This is to ensure that both contracting parties are aware of the consequences of the contract. In addition, the land register enjoys public faith – what is in here applies.

All important conditions, such as the price, the down payment and various dates, between the buyer and seller are listed in the purchase agreement. In order for it to be valid, the contract must be publicly notarized

In the direct mortgage business on the basis of a mortgage note, the creditor or lender receives the mortgage note as a mortgage and becomes the full owner of the title. The direct mortgage business thus consists of two contracts: a loan contract and a mortgage note.

The real estate market refers to the totality of all properties available for purchase and sale. Real estate prices are based on the market principle of supply and demand

Real estate tax, also known as real estate tax, is a cantonal or communal tax on real estate. It is to be paid by the natural and legal persons who are entered in the land register as the owner or usufructuary of a property.

In some cases it is an optional council tax. As a rule, it is calculated on the property’s full tax value, without taking into account the mortgage on it. However, there are also cantons that waive this tax entirely (ZH, SZ, GL, ZG, SO, BL and AG). The property is taxable at the place where the property is located, regardless of where the owner lives. The tax rate is between 0.3 and 3.0 per thousand of the tax value or the income value or a combination of both values.

The real value is made up of the land price and the current value. The current value is formed from the construction costs, minus a devaluation. This devaluation is around one percent per year.

Refinancing is the process by which credit institutions obtain capital to finance lending business (loans and mortgages) – be it from the National Bank or from other financial institutions. Colloquially, the extension or replacement of a mortgage is sometimes referred to as “refinancing”

The register mortgage note also requires a publicly notarized contract between the creditor and the debtor and is created when it is entered in the land register. The registered mortgage note is always in the name of the creditor or the landowner. The register mortgage note is a registered lien. No security will be issued.

For the renovation and maintenance of buildings, owners of condominiums have to save together. These savings are managed in the so-called renewal fund, into which every member of the condominium community pays regularly. When purchasing an existing condominium, it must be checked whether the corresponding financial resources have been paid into the fund in accordance with the condominium regulations.

Renovations are changes to a property. In terms of taxation, a distinction is made between value-preserving and value-adding renovations. While value-preserving investments (such as painting a wall or replacing a disused kitchen appliance) can be deducted from tax, value-increasing investments (such as adding an additional room) are not deductible.

The rental income results from the total of all rental income per year that is generated by a property

As a landlord, you have costs for the maintenance of the property and you have to pay mortgage interest on a regular basis. If the rental income exceeds all expenses, it is referred to as a rental surplus

The surrender right is a completely normal purchase right. Such a right of repurchase is designated if the person entitled was the owner of the property himself and has been granted the right to purchase on the occasion of the property sale.

It is common practice to sign a reservation agreement prior to the actual sales contract.

When buying a property, the buyer often has to make a reservation payment / deposit.

Retirement savings is understood to mean the financial security of the insured person or their family in the event of certain events such as incapacity for work or death. HYPO-CENTER AG will find the optimal pension solution for you that exactly meets your personal needs

With a right of first refusal, the person entitled to pre-emptive has the opportunity to purchase the property when it is sold

At retirement age, homeowners often ask themselves whether they should transfer their property to their children. If the parents want to continue living in the property, there are two options: right of residence and usufruct

Rollover mortgage is another name for the Saron mortgage or money market mortgage

Right of the seller to buy back the former purchase object from the buyer – or in the case of a property with a reservation in the land register – from his legal successor – unless otherwise agreed – at the former purchase price by unilateral declaration of intent within a certain period (max. 25 years)

A SARON mortgage is a mortgage on which interest rates can fluctuate widely. The interest rate changes daily and is not fixed for a given term, as is the case with a fixed-rate mortgage. The SARON stands for Swiss Average Overnight Rate, which can be translated as “Swiss average overnight rate”. For money market mortgages, however, longer-term considerations than one night, for example 3, 6 or more months, are required. This so-called “long-term rate” is calculated using compound interest from the daily rate over a certain period (e.g. 90 days). The result is known in the technical language as Compounded SARAON, that is, «compounded SARON»

Difference between LIBOR and SARON

The LIBOR (London Interbank Offered Rate) is based on estimates or interest rates given by the banks. The SARON (Swiss Average Rate OverNight), on the other hand, is created by determining actual transactions between banks. Because manipulations were found in LIBOR in the past, this reference interest rate for mortgages will be replaced by the more reliably calculated reference interest rate SARON by December 31, 2021 at the latest.

Die zweite Hypothek ist der Anteil an Hypothekardarlehen, welcher 2/3 des Verkehrswertes übersteigt. Seit 2014 müssen sie ihre zweite Hypothek innerhalb von 15 Jahren (vorher 20 Jahren) oder aber bis zum Erreichen des Pensionsalters amortisieren. Teilweise verlangen Finanzinstitute für die zweite Hypothek einen etwas höheren Zinssatz.

Forms of ownership

Are you buying the property alone? Or together with your wife or partner? In the purchase contract at the latest, you must state whether you are buying the house alone or in co-ownership and how much you and your partner are involved in. This information is recorded in the land register. The most common ways to buy a home are:

• Sole ownership: You alone bring the equity with you. You can freely dispose of the property, but you are also solely responsible for maintenance, damage and payment of interest to the bank.
• Joint ownership: In this form of ownership, the owners are jointly owners either through a contract (e.g. through a marriage contract or a simple partnership) or through a legal provision (usually through a community of heirs) – regardless of who has invested how much money in the property. What counts is the superordinate relationship, for example the marriage contract. The ratio determines who is involved in the property and to what extent. In the case of joint ownership, the partners cannot freely dispose of their shares: decisions, for example regarding the sale of the property, must be made jointly.
• Shared ownership: You share ownership with one or more people. The so-called co-ownership shares are recorded in the land register, which are usually based on the contributions of those involved. Everyone can freely dispose of their share, but also has the duties of an owner. If someone wants to sell his share, the other co-owners have a statutory right of first refusal. Decisions are made according to the majority principle. Condominium ownership is a form of co-ownership for which the law lays down detailed rules.

Mortgage with reduced interest rates for new home buyers (offered by many providers and under various names). Depending on the provider, there are also special conditions for new customers who replace a mortgage. The underlying mortgage models can be fixed, variable or money market mortgages.

In addition to cantonal building insurance, owners can cover other risks with supplementary insurance. Earthquakes are not covered by building insurance, although Switzerland is a seismically active area with regularly recurring smaller earthquakes

Contaminated sites and contaminated sites are recorded in the cadastre of contaminated sites (KbS). Thanks to today’s legislation, knowledge and technology – except in the event of accidents – no new polluted locations should arise.

In the case of new buildings, however, it is always necessary to check whether the parcel is entered in the list of suspected contaminated sites (cadastre of contaminated sites). Removing the contaminated sites can be very expensive and must be taken into account in the construction costs.

Swap describes the rate at which banks lend money to each other and secure their loans. The margin of the credit protection costs results from the difference between the swap and the actual interest rate.

If you want to change the financial institution or the mortgage model, you must comply with the notice period. This can vary depending on the mortgage model but also on the provider. For all models, however, we recommend checking at least six months before the mortgage loan expires to see what the notice period is in your case (as shown in the mortgage contract).

Fixed-rate mortgage: The fixed-rate mortgage has a fixed expiration date and an early exit is only possible against an expensive early repayment premium. It is advisable to place the refinancing at the end of the term. In the event of an early change of provider, the fine can amount to several tens of thousands of francs, which is why the change (despite the more favorable new interest rate) would only be worthwhile in very few cases. Check your loan agreement to see whether your fixed-rate mortgage needs to be canceled. There are some providers who require this and who otherwise automatically convert your mortgage into a variable mortgage at the end of the term.
Saron mortgage: Similar to the fixed-rate mortgage, changing providers outside of the terms (usually three to five years) is associated with very high costs. However, many providers offer the option of an internal switch to a fixed-rate mortgage. This is particularly useful if you expect interest rates to rise in the long term.
Variable mortgage: The termination of a variable mortgage is relatively easy, as there is no fixed term. The only thing to note is the notice period of usually three to six months.

Fixed-rate mortgages can be concluded with terms between one and a maximum of 25 years, depending on the provider. The agreed interest rate does not change during the term.

When a property is transferred from one owner to another, this is known as a change of hand.

The (so-called) transfer of property tax is a tax that is levied in Switzerland on the acquisition of real estate and is regulated by the cantons. It is used to tax the change in power of disposal over a property. The real estate transfer tax is due with the registration for the land register entry or with the economic transfer of ownership. The amount of transfer tax must be paid or secured prior to the transfer of real estate.

The purchase price of the property is generally used as the assessment basis for the tax. If no such is stipulated (gift or inheritance), the market or tax value is used as a basis. The tariffs, which differ from one canton to the next, are usually proportional and range between 1% and 3.3% of the purchase price / market value. Cantons that do not have a real estate transfer tax sometimes apply a real estate transfer fee instead (e.g. Zurich). This is also measured on the basis of the purchase price / market value varies from canton to canton and is between 0.2% and 1.3%.

A turnaround in interest rates occurs when the central banks raise interest rates again after lowering them over a longer period of time

The usufruct is a common variant for the generation transition. The landowner transfers ownership of the property including the building to the descendants or a third party. In contrast to the right of residence, the usufructuary has a right to income from the property

Investments in a property that go beyond pure value retention, such as the extension of a wellness room, are referred to as value-adding. In contrast to value-preserving investments, investments that add value are not tax-deductible

Value-preserving investments are investments that maintain the value of a property, but do not increase it. Examples of this are painting walls or replacing a defective dishwasher.

The value quota defines the share of a condominium owner in the entire property and can be found in the land register extract.

Loan with an indefinite term. A termination, usually with 6 months’ notice, is possible at any time for variable mortgages. The interest rate follows the market.

The Japanese yen tempts at times with low interest rates. Is it worth it for Swiss homeowners to take advantage of this and take out mortgages in yen? The risks and costs of a yen mortgage are high. The main risk is currency fluctuations: if the yen exchange rate increases against the Swiss franc, the yen mortgage may be more expensive than a mortgage in Swiss francs despite the interest gains. The financial institutions are therefore very cautious about foreign currency mortgages.