Saving to buy your own home starts now.

Buying a house requires good financial planning. The first step is to save for a deposit – ideally at least 20% of the purchase price. The rest can be financed by a mortgage loan. To find the right financing solution for you, compare offers from different mortgage lenders.

To buy an owner-occupied property in Switzerland, you usually need a deposit of least 20% of the purchase price. At least half of this (10% of the purchase price) must originate from savings, while the remaining 10% can be covered by capital from your pension fund or pillar 3a. The higher your deposit, the better your chances of getting a mortgage with favourable terms.

Pillar 3a is suitable for this purpose and basically anybody who is gainfully employed can set this up. Pillar 3a can be opened either as a tied pension insurance policy with an insurance company or as a tied pension agreement with a bank. Inpayments can be deducted from taxable income, but are limited in amount. The capital is earmarked for one specific purpose and is a supplementary retirement benefit on top of the first pillar (OASI) and second pillar (pension fund). However, there is the option of withdrawing the capital early for the purpose of purchasing or constructing an owner-occupied property or paying off a mortgage on an owner-occupied property. Due to these regulations, pillar 3a is best suited to saving capital to purchase a home while also benefiting from tax privileges.

Depending on how wealthy your parents are, early inheritance or a gift can contribute towards the required deposit. Taking out a loan from family, friends or acquaintances is also possible. However for the purposes of financing, it is often the case that only interest-free loans with no repayment obligation and no fixed term are accepted as a deposit.

A private loan may improve your liquidity but might also impose an additional financial burden. Repayment might present a very protracted burden and stretch your household budget. Careful, long-term financial planning with an appropriate safety net is important to mitigate uncertainty.