Why is a Swiss mortgage split into a first and second mortgage?

Swiss banks cap the first mortgage at roughly two-thirds (65%) of the property value. It is considered low-risk and does not need to be repaid over the life of the loan. Any amount borrowed above that threshold becomes a second mortgage, which carries more risk for the lender and must be paid down within 15 years or by retirement.

What is the minimum down payment for a Swiss mortgage?

Banks generally require at least 20% of the purchase price as a down payment, meaning the mortgage cannot exceed 80% loan-to-value. At least 10 percentage points of that down payment must come from hard equity, such as savings, rather than a Pillar 2 pension fund withdrawal.

Why does the affordability check use 5% instead of my actual interest rate?

Lenders test affordability against an imputed rate, typically around 5%, instead of the current market rate. This ensures a household can still cover payments if interest rates rise well above today's levels, not just at the rate they are currently offered.

Do I ever have to repay the first mortgage?

Not on a fixed schedule. Only the second mortgage has a mandatory amortization plan, reducing the loan-to-value ratio to 65% within 15 years or by the borrower's retirement age. The first mortgage can be carried indefinitely, refinanced, or repaid voluntarily.

What happens if my affordability ratio is above 33%?

Most Swiss lenders will not approve the loan, or will only approve a smaller amount, if total housing costs at the imputed rate exceed about 33% of gross income. Increasing the down payment, choosing a cheaper property, or adding a co-borrower's income are the usual ways to bring the ratio back under the limit.

Switzerland Mortgage Calculator

Name: Switzerland Mortgage Calculator
Availability: InStock
Author: Nham Vu

Enter the property price, down payment, and interest rate to see your first and second mortgage split, monthly payment, and whether you pass the standard Swiss affordability test.

Property & Loan Details

Property Price

CHF

Down Payment (Own Funds)

CHF

25.0% of price

Mortgage Interest Rate

% p.a.

Gross Annual Household Income (for affordability)

CHF

Assumes the standard Swiss conventions: first mortgage capped at 65% of the property value, second mortgage amortized over 15 years, 1% of price for annual maintenance, and a 5% imputed rate for the affordability check.

Enter the property price and down payment to see the mortgage breakdown.

Monthly Mortgage Payment

CHF 0

interest + mandatory amortization

Loan Amount

CHF 0

0% LTV

First Mortgage

CHF 0

up to 65% of price, no amortization

Second Mortgage

CHF 0

amortized over 15 years

Est. Maintenance

CHF 0

per month, 1% of price / yr

Monthly Cost Breakdown

Interest (actual rate)	CHF 0
Second mortgage amortization	CHF 0
Maintenance & ancillary costs	CHF 0
Total monthly housing cost	CHF 0

Affordability Check —

Housing cost at the imputed 5% rate, as a share of gross annual income. Swiss lenders generally require this to stay at or below 33%.

Summary

Enter the property price, down payment, and interest rate to see your first and second mortgage split, monthly payment, and whether you pass the standard Swiss affordability test.

How it works

Enter the property purchase price and the down payment (own funds) you plan to contribute.
Enter the actual interest rate your lender is offering.
Enter your gross annual household income to run the affordability check.
The calculator splits the loan amount into a first mortgage, capped at 65% of the property value, and a second mortgage for the rest.
It computes the second mortgage's mandatory 15-year amortization plus monthly interest and estimated maintenance costs.
It compares your total housing cost, recalculated at the imputed affordability rate of 5%, against the standard 33% of gross income limit.

Use cases

Estimating the monthly cost of buying a house or apartment in Switzerland before applying for a mortgage.
Checking whether a planned down payment meets the 20% minimum Swiss banks require.
Seeing how the second mortgage's mandatory amortization affects the monthly budget.
Testing whether household income passes the standard one-third affordability rule.
Comparing scenarios with different down payments or interest rates before negotiating with a lender.
Understanding the split between a first and second mortgage on a specific property price.

Frequently Asked Questions

Last updated: 2026-07-25 · Reviewed by Nham Vu