Hypothetical question: I read on another thread that the Swiss Govt or banking institution will guarantee money in Swiss accounts up to CHF30,000. Now with several doom and gloom forecasts about UBS, what would happen if say you had a mortgage with UBS for 100,000 and 50,000 in a current account and UBS went bust, could the 20,000 that UBS don’t cover in your current account just be deducted from your mortgage? ie you only pay back 80,000 ensuring that everyone is happy so to speak.
Does that make sense?

The bank's obligation to you is 30.000 and this sum should be in the reserves the bank must keep, by law. Your 20.000 is lost.

Your mortgage repayment is an asset to the UBS. That is what banks "sell". This will be part of all assets when the bank is wound up and is distributed first to creditors (who may sell the assets to the highest bidder), the remainder then goes to shareholders (who usually get nothing in practice).

Your loan probably would end up in the hands of some another financial institution. If you are lucky, you just carry on paying as normal. If not, depending on the terms of the loan, I have read of a case where that the conditions of the mortgage were changed to the advantage of whoever bought the package of which the mortgage is a part.

But your question was if the 20.000 can somehow be saved by taking it from the mortgage.

No.

This brings me to the next question. What kind of money does Swiss govt have? Didn't they sell some of their bullion few years ago?