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In short: For a mortgage in Switzerland you generally need at least 20 % equity (of which 10 % ‘hard’, not from the pension fund) and an income where the notional housing costs – calculated at 5 % interest plus ancillary costs and amortization – do not exceed about one third. The loan is capped at 80 % of the value.

Buying a Home in Switzerland: Mortgage, Equity and Taxes

Kontoo editorial team · Updated 06/24/2026

Buying a home in Switzerland requires two things: enough equity and an income that can carry the costs. Banks check both against fixed rules. On top of that come cantonal taxes that differ widely from canton to canton. This chapter explains the basics factually – as of 2026; when in doubt, check the official sources.

  • Gather your equity: at least 20 % of the lending value, of which at least 10 % must be ‘hard’ equity (savings, securities, pillar 3a) – pension fund money does not count toward this 10 %.
  • Calculate affordability: a notional interest rate of 5 %, plus around 1 % for ancillary costs/maintenance, plus amortization – the total should not exceed roughly one third (~33 %) of gross income.
  • Plan the amortization: the second mortgage (the portion above two thirds of the value) must generally be repaid within 15 years or by retirement.
  • Budget purchase costs and taxes: notary, land registry and – depending on the canton – property transfer tax.

What matters

In Switzerland, buyers almost always finance their home with a bank mortgage and a share of equity. Two hurdles decide the financing: equity and affordability. Equity: the bank lends against an owner-occupied property up to a maximum of 80 % of its value. You contribute the remaining at least 20 % yourself. The distinction matters: at least 10 % of the value must be ‘hard’ equity – savings, securities or pillar 3a assets. Pension fund money (2nd pillar) can be withdrawn or pledged for the portion beyond that, but does not count toward this 10 %. Affordability: so that the financing holds up even if rates rise, banks calculate with a notional interest rate of 5 %, not with the lower current market rate. On top come around 1 % of the value for ancillary costs and maintenance, plus the amortization. These notional housing costs should not exceed about one third (~33 %) of gross income. Amortization: the first mortgage (up to around two thirds of the value) does not have to be repaid. The second mortgage – the portion between two thirds and 80 % – must generally be amortized within 15 years or by retirement. Taxes and costs: at purchase there are notary and land registry costs, plus, in many cantons, a property transfer tax on the purchase price. Rates vary widely by canton: Zurich has abolished the transfer tax and charges only small fees; Schwyz is the only canton that levies neither a transfer tax nor corresponding fees. Other cantons sit roughly in the range of about 1 % to 3 % of the purchase price, sometimes with relief for owner-occupied property. Always check the rate of your specific canton. Imputed rental value: today, anyone living in their own home must tax a notional rental value as income. This tax is being abolished – the reform was approved on 28 September 2025 and enters into force on 1 January 2029. Until then the old system applies.

ExampleAffordability example: purchase price CHF 1,000,000, equity CHF 200,000 (20 %), mortgage CHF 800,000. Notional interest: 800,000 × 5 % = CHF 40,000/year. Ancillary costs/maintenance: 1,000,000 × 1 % = CHF 10,000/year. Amortization of the second mortgage (from 666,666 to 800,000, i.e. about CHF 133,000 over 15 years) ≈ CHF 8,900/year. Total ≈ CHF 58,900/year. For this to be at most one third, you need a gross income of around CHF 177,000. (Simplified example, no commitment from a bank.)
Run your numbers before you view properties: use the Kontoo mortgage calculator (/mortgage-calculator) for equity and affordability, and check the cantonal taxes with the tax office of your canton.

In depth

First and second mortgage

Banks often split the mortgage into two tranches: the first up to around two thirds of the value (no mandatory amortization) and the second from there to 80 %. Only the second mortgage is subject to the amortization requirement – generally within 15 years or by retirement.

Direct and indirect amortization

With direct amortization you repay the debt over time. With indirect amortization the money flows into pillar 3a instead, which later reduces the mortgage. Which variant is more tax-efficient depends on the individual case – and partly changes with the imputed rental value reform from 2029.

Property transfer tax is cantonal

Whether and how much property transfer tax applies depends entirely on the canton. Some cantons have abolished it, others levy it on the purchase price, sometimes with allowances for owner-occupied property. Include the costs of your specific canton in your budget.

Checklist

  • Do I have at least 20 % equity, of which at least 10 % is ‘hard’ (not from the pension fund)?
  • Do the notional housing costs (5 % interest + ~1 % ancillary costs + amortization) stay below roughly one third of my gross income?
  • Have I factored in the property transfer tax and the notary/land registry costs of my canton?
  • Am I clear that the imputed rental value only falls away from 2029 and remains taxable until then?

Common myths

Myth: “I can take all my equity out of the pension fund.”

Reality: No. At least 10 % of the value must come from ‘hard’ equity (savings, securities, pillar 3a). Pension fund money only covers the portion beyond that.

Myth: “If the current rate is low, the mortgage is automatically affordable.”

Reality: Affordability is calculated with a notional rate of 5 %, not the current market rate. This keeps the financing robust even if rates rise.

Frequently asked questions

How much equity do I need for a home in Switzerland?

At least 20 % of the lending value. Of that, at least 10 % must come from ‘hard’ equity (savings, securities, pillar 3a). Pension fund money (2nd pillar) can be withdrawn or pledged for the remainder, but does not cover the required 10 %.

What does the 33 % rule mean?

Ongoing housing costs – calculated with a notional rate of 5 %, around 1 % for ancillary costs/maintenance and the amortization – should not exceed about one third of your gross income. It is a stress test for rising rates, not the current rate.

Is the imputed rental value being abolished?

Yes. Voters and cantons approved the reform on 28 September 2025; the Federal Council set the entry into force for 1 January 2029. Until then the imputed rental value remains taxable as income. With the reform, most deductions for maintenance and debt interest also fall away for owner-occupied homes.

Related lessons

Swiss Income TaxTax Returns (Switzerland)Pensions & Saving (Switzerland)

All lessons · Glossary · Editorial · Kontoo does the math and explains – this is general education, not tax, legal or financial advice.

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