Which property someone chooses will always depend on their financial situation. This is why it makes sense to establish a budget. Annual household income and the equity available serve as a basis here. Our budget calculator shows you what your budget could be.
The equity portion required will depend on what the property will be used for. For owner-occupied residential property, equity worth 20% of the market value is normally necessary. At least 10% of this figure must be so-called ‘hard’ equity. This means the money may not come from an occupational pension (pension fund). Equity can include savings, 3rd pillar investments and easily realisable assets. If you receive an advance on inheritance or a gift, you can also use this capital to fund your house purchase. More equity is necessary when buying investment and holiday properties.
It is important to request all documentation on the property either before or at the time of the viewing. This is the only way to get the full picture and pick up information on important points such as previous renovation work or potential overheads. The file needs to be complete, by the time you take out your mortgage.
If the property is financed via a mortgage, the lenders will also request various documents for checking creditworthiness and affordability.
As a basic rule, the more comprehensive your documentation, the lower the risk of any nasty surprises. A complete file also favours efficient processing of any potential loan.
The property market is incredibly competitive in many regions. Often properties disappear from the market after just a few days or change hands in a private house sale. So it's important to know the various options when searching for a property and to read up on the respective advantages and disadvantages.
To see as many suitable offers as possible, it makes sense to consider various search providers. We can help with this: our property search portal gathers advertisements for you from all the well-known property platforms. This includes properties you will only find with us. You can access the biggest possible selection of properties for sale.
Buying a house is a considerable financial commitment. Banks and other financial institutions issue mortgages to fund property purchases. But buyers are obliged to provide at least 20% of the purchase price by way of equity. Half of this can come from an occupational pension (pension fund), while the other half must take the form of assets (account balances, shares). So anyone hoping to buy a home simply has to build up equity from early on. There are various ways of building up the necessary equity: in addition to individual savings products/solutions, it is also possible to use funds from a gift or an advance on inheritance. Banks also accept private loans – from, say, family members – subject to certain conditions.
There are various options for building up equity for buying a house. In any case, we recommend looking into these at an early stage. This can help turn those dreams of owning a home into reality.
Pillar 3a is a good option for building up capital for a home and saving on taxes. Also known as ‘tied pension provisions’ as the assets saved are blocked until retirement age and may only be used for specific purposes. These are:
A Pillar 3b pension is associated with a certain freedom as there are no withdrawal criteria. The available options for 3b savings will often include securities, insurance polices, funds, or savings accounts. These products may also be used to protect against risks such as death or disability. 3b assets may be counted as additional security for home purchase purposes, thereby improving the credit rating.
People in work generally have assets in a pension fund (2nd pillar). If the pension fund shows a gap in contributions, for example due to a break from work, you can close this gap through subsequent payments. A salary increase is also often an opportunity to make additional payments. The potential scope for you to make payments will be clear from your pension fund statement. The amount paid is deductible for income tax purposes. If you buy a home, pension fund monies may be withdrawn or pledged as additional security. Worth knowing: a withdrawal is only possible every 5 years and no earlier than 3 years after a voluntary purchase.
Securities such as shares or bonds often achieve a more attractive return than savings accounts. This can help you achieve your savings target more quickly. Always make sure you get advice on any securities investments: the right solution will depend, among other things, on your needs, the time scale involved and your appetite for risk. Our advisors will help you choose the right investment solution.
An advance on inheritance is voluntary transfer of funds between testators and heirs while the all parties are alive. It provides a way, for example, for parents to offer their children financial support. An advance on inheritance must be set out in the will and with an appropriate settlement made, so other eligible heirs – mostly siblings and other family members – not left at a disadvantage.
An advance on inheritance or a gift are generally taxable. However, the rules do vary from canton to canton.
An advance on inheritance counts towards so-called ‘hard equity’. In other words, the bank counts the advance on inheritance towards the assets you have saved. This may entitle you to better terms when the mortgage is issued. Please note: an interest-bearing loan does not count as equity.
You may have the option to take out a loan from a third party. This money may count towards the equity you need to buy a property. However, not all banks will accept this solution as it involves you taking on additional debt. Only an interest-free loan with no fixed term is counted as equity by individual finance partners. Clarify this point in good time. Also with private loans, it is again essential to set the terms out in writing.
In principle, a loan is deductible for wealth tax purposes. However, if something is financed completely with external funds, this may lead to less advantageous terms when a mortgage is issued.
There property market fluctuates seasonally. This can be seen in the number of property advertisements placed, with the market’s quietest period lasting from November to February. For example, the number of listings in January is 6.5% below the average for the year. The property market starts to pick up again in the spring. On average, the highest number of properties are available in September of any given year. So we advise anyone interesting in buying to subscribe to various search portals from the start of the year. Incidentally: in addition to the properties found on all the usual search sites, our search portal also has a host of properties you will only find with us.