Mortgage Regulations for Foreigners in Switzerland
Switzerland is an attractive economy, as it provides one of the highest income levels across Europe. Foreigners are welcomed here for personal matters – such as relocation, or to start a company. However, since the country is not a member state of the European Union (EU), its regulations available for foreigners can differ. In this sense, we mention the mortgage regulations, which are applicable to foreign persons, but which are much stricter than in the case of Swiss persons. Those who are involved in a real estate transaction can receive legal assistance from our Swiss law firm.
Who can get a Swiss mortgage
In order to obtain a Swiss mortgage, the foreigner will need to be the owner of a residence permit issued by the local authorities. The authorities in Switzerland allow the following types of foreign persons to receive a mortgage here:
• citizens of the EU;
• citizens of the European Free Trade Association (EFTA).
• citizens outside these communities, as long as they have received a residence permit.
In order to qualify for a mortgage in Switzerland, the persons will need to have to the following types of residence permits:
• residency permit B (issued for the citizens of the EU and EFTA communities);
• residency permit C (issued for citizens outside the above mentioned entities).
Mortgage system in Switzerland
Persons who are interested in purchasing a property in Switzerland have to follow a procedure which is applicable to all types of citizens. That is, the Swiss banks can provide 80% of the overall sum of money, while the purchaser will need to deposit 20% of the mortgage’s value and our law firm in Switzerland can assist with more details about the legal requirements.
It is important to know that 10% of the deposit must be provided in cash. Another important aspect is that in Switzerland, the pension fund can act as a security for the mortgage, depositing the other 10%.
However, foreigners who have been living in Switzerland for a short period of time won’t be able to access such funds, regardless if they are state funds or private ones.
In order to apply for a mortgage here, the foreigners will need to get in contact with a local bank and establish the terms of the agreement. For this, it will also be necessary to open a Swiss bank account.
Persons who need legal assistance on the Swiss regulations related to a mortgage can contact our attorneys in Switzerland for more details.