Everyone dreams of owning a property, and expats – just like locals – can view a Swiss mortgage as an attractive proposition. The process of building up a suitably large deposit and then finding that dream home usually takes months if not years. However, at Fern Wealth, we’ve always encouraged our clients to put those savings to work rather than letting them sit idle in a bank account.
With Swiss interest rates now at zero – and possibly heading lower later this year – holding cash in the bank is no longer a viable option for growing your wealth. That’s why we’ve developed a range of Swiss Franc ETF portfolios, professionally managed across five different risk structures. These portfolios are liquid, flexible, and tailored to a wide range of investor profiles, from cautious to growth-focused. Best of all, they can be converted back into cash quickly when your property plans are ready to move ahead. Over the last 10 years, these portfolios have delivered a cumulative annual growth return (net of costs) of up to 6.76% for our clients.
How Swiss Mortgages Work
For expat executives planning to purchase property in Switzerland, understanding the local mortgage system is key. In contrast to models in the UK or US, Swiss mortgages typically finance up to 80% of a property’s value. Buyers are expected to contribute at least 20% equity, of which a maximum of 10% may come from pension fund assets (2nd pillar). The rest must be liquid.
Mortgages are usually structured in two tiers:
- First mortgage: Covers up to 65% of the property value and does not need to be repaid during the homeowner’s lifetime.
- Second mortgage: Covers the remaining 15% and must be repaid within 15 years or by retirement.
Because mortgage interest is tax-deductible and an imputed rental value is added to your taxable income, many homeowners choose not to fully repay their mortgage – unlike in other countries. This offers opportunities to use mortgage financing as a long-term wealth management strategy.
Fixed or Flexible?
There are several mortgage types to consider:
- Fixed-rate mortgages: Lock in rates for 2 – 15 years – ideal if you value stability.
- SARON-based mortgages: Linked to the Swiss money market rate and adjusted quarterly, these can offer cost savings but with more rate variability.
- Interest-only mortgages: Often used by wealthier investors looking to preserve liquidity while investing elsewhere.
At Fern Wealth, we help clients assess which structure suits their personal and financial situation best.
Property as Part of Your Wealth Strategy
Real estate in Switzerland continues to be a stable, long-term investment – especially in prime locations like Zug, Zurich, and Lucerne. As part of a diversified portfolio, Swiss property can offer not just a home base, but also tax efficiency and capital appreciation potential.
Whether you’re preparing to buy now or still building your deposit, let us help you make smarter decisions with your money.
Want to learn more?
Contact Fern Wealth AG for a personalised strategy session – whether you’re ready to buy, or just beginning to plan.
Photo Credit: ALLY
