Real Estate Financing in Switzerland
Equity, Mortgages, and Providers in Canton Zug
On the path to homeownership, early financial planning is essential. We highlight the key points about equity, mortgages, and providers in Canton Zug – so you can begin your home or apartment purchase fully prepared.
How Much Equity Do You Need to Buy a Home?
In Switzerland, buyers must contribute at least 20% equity toward financing:
- 10% hard equity: Cash, savings and salary accounts, pillar 3a assets, securities, or gifts/advances on inheritance.
- 10% soft equity: Possible withdrawal from your pension fund (2nd pillar).
Important: Banks base their calculation on the market value of the property, not the listed sales price. These figures may differ.
For holiday homes or investment properties, stricter rules apply: typically 40% equity is required, and pension assets cannot always be used.
Mortgages – How Financing Works
Up to 80% of the purchase price can be financed with a mortgage:
- First mortgage: Covers two-thirds of the property value; no repayment required.
- Second mortgage: Must be repaid within 15 years.
When granting a mortgage, banks also check affordability:
- Total costs (interest, amortization, maintenance) must not exceed one-third of gross income.
- Banks calculate using a notional interest rate of about 5%, regardless of the current market rate.
Mortgage Providers in Canton Zug
Most mortgages in Switzerland are granted by banks. Pension funds may occasionally provide financing, but this is less common.vBy comparing different providers, you can find the best solution for your financial situation. Strong partners in Zug include:
These institutions provide advice, mortgages, and financing confirmations – often decisive in Zug’s competitive real estate market.
A financing confirmation shows sellers the maximum amount your bank is willing to finance, independent of a specific property.
Mortgage Brokers as an Alternative
Instead of working directly with banks, you can also use a mortgage broker.
Advantages:
- Access to a wide range of offers
- Helpful for complex cases (e.g., buyers close to retirement)
- Support in comparing terms
Disadvantages:
- Longer processing times
- Risk that the property is sold before the financing confirmation is issued
Mortgage brokers in the Zug region include:
Always seek advice from your trusted bank to secure the financing solution that best fits your personal situation.