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Old 01.01.2019, 18:06
ThomasSSS ThomasSSS is offline
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Re: Advisable to buy property in Zurich?

20% is the normal minimum, 10% can instead be a pledge against a pillar 2 pension fund, (meaning that you only need 10% cash on hand) but that isn't relevant until you've built up such a Swiss fund.

It is normal to amortize down to 65% loan-to-value, and then pay only interest. This means that when the mortgage terminates (10 years is the longest fixed mortgage I've seen advertised) you need to refinance. For this reason they have an affordability criteria based on what happens if interest rates go to 5% - will making a 5% p/a interest payment on the remaining balance be more than 1/3 of your pre-tax income? A subtle point that matters for some is how much of your bonus and stock grants should count for this purposes, and different banks can do this differently.

So if you have 20%+ down, e.g. because you sold a place and had real equity in it, you can work backwards to see how much you can afford. Also, you might get a lower rate if you can put 35% down and avoid amortization.

There is a comparis database showing that advertised apartment purchase prices in Zurich went from 6k/m^2 in 2007 to around 10k in 2012 and since then have more or less slowly risen past 12k/m^2. Whether this is a sign of strength, or a sign of a potential bubble is left as an exercise for the reader.

Last edited by ThomasSSS; 01.01.2019 at 18:13. Reason: fix/clarify details
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