Budget Calculator — How Much House Can I Afford?

How Much House Can I Afford?

Anyone wanting to buy a property in Switzerland faces a central question: How high can the purchase price be? The answer depends on two factors — your income and your equity. Swiss banks check the so-called affordability: the notional housing costs (interest, amortisation, ancillary costs) may not exceed 33% of your gross income.

Banks do not use the current market rate, but a notional interest rate of 5%. This safety buffer ensures that you can service your mortgage even if interest rates rise. In addition, the 2nd mortgage (the portion above 66.7% of the lending value) must be amortised within 15 years, and 1% ancillary costs per year on the property value are added.

At the same time, banks require at least 20% equity, of which at least 10% must not come from the pension fund. Your maximum purchase price is therefore limited by the lower of the two values — income or equity.

Equity: What Counts?

For financing your home, you can use various sources as equity:

• Savings — cash, savings accounts and securities
• Pillar 3a — early withdrawal of tied pension capital (up to 5 years before retirement)
• Pension fund (BVG) — early withdrawal or pledge (max. 10% of purchase price from pension fund)
• Inheritance advance — early inheritance as equity
• Gift — monetary gifts from relatives

Important: The bank wants to see that at least 10% of equity comes from "hard" sources — i.e. not from the pension fund.

Tips for First-Time Buyers

As a first-time buyer in Switzerland, you should start saving early. Maximise your use of pillar 3a (2025: CHF 7,258 per year for employees) and check whether an inheritance advance is possible. Compare several banks and insurers — the terms differ significantly. And think about purchase ancillary costs (transfer tax, notary fees, land registry fees): depending on the canton, these amount to 1–5% of the purchase price and must be additionally financed.