As a first-time buyer in Switzerland you need at least 20% equity, of which at least 10% must be "hard" (not from the pension fund / Pensionskasse). Rule of thumb: the purchase price may be at most 5 times your gross annual income, and annual housing costs at most 33%. The buying process typically takes 3-6 months. Only 36.4% of Swiss own their home (the lowest rate in Europe), and the average first-time-buyer age is 38. This guide takes you through 10 steps from budget planning to moving in.
At least 20% of the purchase price, of which at least 10% must be "hard" equity (not from the pension fund / Pensionskasse). For an apartment costing CHF 800'000, that is at least CHF 160'000. "Hard" equity includes a savings account, securities, pillar 3a (advance withdrawal min. CHF 20'000, 3-year blocking period on sale), advance inheritance and gifts. The pension-fund (PK) advance withdrawal does not count as "hard" and can be applied to a maximum of 10% of the purchase price.
Rule of thumb: maximum purchase price = 5x gross annual income. A household with CHF 150'000 gross income can afford around CHF 750'000. In addition, the affordability rule applies: a notional mortgage interest rate of 5% plus 1% ancillary costs plus amortisation may not exceed 33% of gross income. On top of this come one-off incidental purchase costs of 3-5% of the purchase price.
Budget for one-off incidental costs of 3-5% of the purchase price: property transfer tax (Handänderungssteuer, 1-3% depending on the canton, 0% in Zurich), notary costs (0.1-0.5%), land register (Grundbuch) fees (0.1-0.3%) and, where applicable, an estate agent's commission (1-3%). In the Canton of Zurich the incidental costs are low, as no property transfer tax is levied. On top of this come ongoing ancillary costs of CHF 3-5/m² per month.
Obtain at least 3-5 offers. Interest-rate differences are often 0.2-0.5%, which on a CHF 600'000 mortgage amounts to CHF 1'200-3'000 per year. At current rates (SARON approx. 0.64%, 5-year fixed-rate mortgage approx. 1.3-1.5%), SARON is significantly cheaper. First-time buyers are advised to use tranching: 50-60% fixed-rate mortgage and 40-50% SARON mortgage.
The reservation agreement is not regulated by law in Switzerland but is common market practice. Typical: reservation fee CHF 5'000-20'000 (credited against the purchase price), reservation period 4-8 weeks for the financing commitment. Never sign without a withdrawal clause. If the financing falls through, the fee should be refunded. A legal review costs CHF 300-500.
Location determines 60-70% of a property's value. Tax multiplier (Steuerfuss), public transport access and infrastructure matter more in the long run than the fittings. Other common mistakes: obtaining only one mortgage offer (the difference is often CHF 3'000-5'000 per year), underestimating renovation needs (CHF 100'000+) and not reading the condominium (StWE) bylaws. A contract review by a lawyer costs CHF 500-1'500, and a building expert CHF 1'500-3'000.