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-   -   Mortgage deposit % (https://www.englishforum.ch/finance-banking-taxation/168572-mortgage-deposit.html)

Country_Mouse 04.02.2013 17:55

Mortgage deposit %
 
Hi guys, anyone know if there are any banks in CH that offer house mortgages for less than 20% deposit?

Seen a couple houses but can only rustle up 10-15% deposit.

TiMow 04.02.2013 18:05

Re: Mortgage deposit %
 
Unlikely - but you can still ask.

Try your local Kantonal bank - they're less faceless than some of the bigger ones.

You may be able to offset the shortfall with a personal pension or insurance.

PaddyG 04.02.2013 18:07

Re: Mortgage deposit %
 
Can you not top it up to 20% by using your pension? We rustled up the entire 20% by doing so.

magyir 04.02.2013 18:09

Re: Mortgage deposit %
 
It's going to depend on whether you want to buy in a "blaseregion" or not. If you're not looking in an already overheated area price/value-wise you might make it.

I'd recommend the ZKB for Zürich canton based on personal experience. As the previous poster mentioned, making up the shortfall with a pledge of Pillar 3 assets is going to help, Pillar 2 has become less fashionable since the boom started.

CorsebouTheReturn 04.02.2013 18:13

Re: Mortgage deposit %
 
Quote:

Originally Posted by magyir (Post 1788543)
It's going to depend on whether you want to buy in a "blaseregion" or not. If you're not looking in an already overheated area price/value-wise you might make it.

I'd recommend the ZKB for Zürich canton based on personal experience. As the previous poster mentioned, making up the shortfall with a pledge of Pillar 3 assets is going to help, Pillar 2 has become less fashionable since the boom started.

Like suggested here, can you really afford a property?
If you have issue with deposit, might be worth considering not buying yet, especially if it means big mortgage, repayments, possibility of raising interest rest, likelihood of market collapsing (losing value), etc...

I'm no expert- but there's a few topics on the forum....

Country_Mouse 04.02.2013 18:23

Thanks guys, only been here 4 years so my pension is low. I could transfer my UK pension here but of course would cost!

Savings and pension are roughly 80k!

Caviarchips 04.02.2013 18:38

Re: Mortgage deposit %
 
10% is offered by big banks, but its an exception

Phil_MCR 04.02.2013 18:41

Re: Mortgage deposit %
 
you could try asking around. a friend of mine got lower deposit requirements from a french bank (though didn't go with them as they were a PITA).

you might want to consider if you want to do that esp. if the bank makes a 'margin call' on you and you end up having to find a bigger deposit in a short space of time.

1SIX1 04.02.2013 18:41

Re: Mortgage deposit %
 
offer to pledge assets like a UK pension. Discuss it with the smaller, local lenders.

I did 5% cash deposit and 15% pledged for my first house.

Country_Mouse 04.02.2013 18:47

Quote:

Originally Posted by 1SIX1 (Post 1788610)
offer to pledge assets like a UK pension. Discuss it with the smaller, local lenders.

I did 5% cash deposit and 15% pledged for my first house.

Sounds promising, with who?

1SIX1 04.02.2013 18:49

Re: Mortgage deposit %
 
this was back about 9 years ago with UBS. I also worked for them at the time but they're looking to own assets to offset their risk.

I'd talk to ZKB and a local Raiffeisen if I was you.

V__ 04.02.2013 19:18

Re: Mortgage deposit %
 
Things seems to have changed in the last 2-3 years, most of the banks will not accept anything else than 20% cash, even if you are little bit short they won't even try to help you.

Phil_MCR 04.02.2013 19:19

Re: Mortgage deposit %
 
didn't they bring in a new law requiring 20% deposit?

AjarnPat 04.02.2013 19:21

Re: Mortgage deposit %
 
Hi,
When I looked, I was told I would not find less than 20%, but got 15% with ZKB in Affoltern am Albis. I don't think you'll get a deal for less.
My view is it is better to keep your swiss pension in as a pension if possible. If you draw pension and later wish to transfer back in (pillar 2, I think it is) you would not reduce your income tax (as you normally would) until the withdrawal is paid back. This includes any foreign transfer you make to your swiss pension, then "withdraw" to make up the deposit - I know because I did this.

The other big question you think about is, on the mortgage, how much you go with libor only and what proportion you choose to pay extra for guaranteed rate.... I went with 100% libor 4 years ago and every time I sees my bank manager he says he wished he'd have done the same....
Good luck.
AP

jacek 04.02.2013 21:51

Re: Mortgage deposit %
 
It is not my place to tell you what to do but wouldn't it make more sense to wait and keep on saving until you will be able to put down 20%. If initial deposit is already an issue then most likely the whole repayment won't be easy either.

We patiently wait until we will collect full amount then reconsider offers. I heard it thru the grapevine that highly inflated prices of real estate should be dropping soon in coming years.

fatmanfilms 04.02.2013 22:10

Re: Mortgage deposit %
 
Quote:

Originally Posted by 1SIX1 (Post 1788610)
offer to pledge assets like a UK pension. Discuss it with the smaller, local lenders.

I did 5% cash deposit and 15% pledged for my first house.

They won't accept a UK pension unless your over 55 as it can't be converted to cash, only 25% can be taken as cash. The early retirement age just changed this year for people who are 50 now, there will be a few people aged 52-54 that can also draw now.

Guest 04.02.2013 22:17

Re: Mortgage deposit %
 
Quote:

Originally Posted by jacek (Post 1788856)
I heard it thru the grapevine that highly inflated prices of real estate should be dropping soon in coming years.

Was that grapevine every person in Switzerland, plus the entire Swiss media? :rolleyes:

Here's the 22 yards prediction, which is worth as much as anyone else's: at some point, interest rates will increase. House prices will start to drop ... slowly, and not by a huge amount (this is a very illiquid market. Sales are rare, and slow). New buyers will end up paying a little less for their homes, but more on their mortgage payments.

So if you're all cashed up and don't need a loan, sure, wait. But otherwise -- I doubt there's going to be a big financial benefit.

jacek 04.02.2013 22:44

Re: Mortgage deposit %
 
Quote:

Was that grapevine every person in Switzerland, plus the entire Swiss media? :rolleyes:

Here's the 22 yards prediction, which is worth as much as anyone else's: at some point, interest rates will increase. House prices will start to drop ... slowly, and not by a huge amount (this is a very illiquid market. Sales are rare, and slow). New buyers will end up paying a little less for their homes, but more on their mortgage payments.

So if you're all cashed up and don't need a loan, sure, wait. But otherwise -- I doubt there's going to be a big financial benefit.
That's why until then watch them growing, me said and when the right time comes - unleash your cash ;)

Caviarchips 04.02.2013 22:49

Re: Mortgage deposit %
 
Quote:

Originally Posted by V__ (Post 1788653)
Things seems to have changed in the last 2-3 years, most of the banks will not accept anything else than 20% cash, even if you are little bit short they won't even try to help you.

I know of three national banks, including the two big ones who would do 10% 18 months ago. But as I said, its by exception

Quote:

Originally Posted by Phil_MCR (Post 1788654)
didn't they bring in a new law requiring 20% deposit?

No

fatmanfilms 04.02.2013 22:59

Re: Mortgage deposit %
 
Quote:

Originally Posted by Caviarchips (Post 1788937)


No

I think the change was not allowing the entire deposit to be pension, you have to put some real cash on the table.


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