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Old 30.11.2018, 13:47
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New EU Banking regulation impacts investments for Swiss residents

Hi all,

Until september this year, banks in EU told us it was no problem to buy a property in EU whilst being resident and employee in Switzerland. Apparently, a new regulation was introduced a month ago, advising all banks to only borrow funds to EU resident (and thus no swiss residents).

We have been contacting various banks to potentially get a loan, without luck.

Do you know which EU banks might be OK to give a mortgage loan to swiss residents?

Thanks for your help!
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Old 30.11.2018, 14:33
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Re: New EU Banking regulation impacts investments for Swiss residents

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Do you know which EU banks might be OK to give a mortgage loan to swiss residents?
You are asking if we can recommend a bank that is willing to break an EU directive!

And actually you are expecting them to breach both the provisions relating to consumer protection for a foreign client and rules relating to granting a loan in a currency other than that in which the income is earned...

I doubt you’ll find any reputable bank willing to do that..
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Old 30.11.2018, 14:41
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Re: New EU Banking regulation impacts investments for Swiss residents

What is this directive?
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Old 30.11.2018, 14:44
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Re: New EU Banking regulation impacts investments for Swiss residents

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You are asking if we can recommend a bank that is willing to break an EU directive!

And actually you are expecting them to breach both the provisions relating to consumer protection for a foreign client and rules relating to granting a loan in a currency other than that in which the income is earned...

I doubt you’ll find any reputable bank willing to do that..
What a helpful answer, thank you for your time and input on my question...

As you are correctly mentioning, it is a DIRECTIVE, hence not a legal RULE. This means that banks are completely free to follow or not to follow this directive. You cannot 'break' a directive.

As said, up to 1-2 months ago, there was no issue at all and I know many people working in Switzerland who have invested in various EU countries.

I have no intention to start a discussion here on what do you think is right or wrong, I came to this forum to ask for an answer on my question. Hopefully other people will be able to help us.

Regards
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Old 30.11.2018, 14:57
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Re: New EU Banking regulation impacts investments for Swiss residents

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As you are correctly mentioning, it is a DIRECTIVE, hence not a legal RULE. This means that banks are completely free to follow or not to follow this directive. You cannot 'break' a directive.
It may be a directive but banks will adhere to it (there is no european law, it needs to be adapted per country, hence the directive).

https://residential.jll.de/en/new-re...more-difficult

If you have significant (or at least sufficient) income in the currency of the mortgage, you have a chance of getting a mortgage (I got mine in 2014).

AFAIK it is still this one:

https://ec.europa.eu/info/law/mortga...-2014-17-eu_en

Last edited by roegner; 30.11.2018 at 15:09. Reason: Adding
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Old 30.11.2018, 17:18
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Re: New EU Banking regulation impacts investments for Swiss residents

If you're looking for french property, try Crédit Foncier, I've got my loan through them few years ago when all other FR & CH banks either didn't want combination of Swiss resident+EU property or their requirement for cash was way high (ie 40% of property price + fees which is additional +-7%).

But if its EU-wide change, it might not work out. In that case, your only option would be Swiss banks, some of them were doing this (but had those cash requirements too).
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Old 30.11.2018, 17:30
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Re: New EU Banking regulation impacts investments for Swiss residents

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As you are correctly mentioning, it is a DIRECTIVE, hence not a legal RULE. This means that banks are completely free to follow or not to follow this directive. You cannot 'break' a directive
The directive has been out there since about 2014 in draft format, with a target implementation date in 2016. So yes at this stage you are asking them to break a directive. And this stage i seriously doubt that you will find any bank willing to engage in hair splitting with you. But off you go.
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Old 30.11.2018, 17:41
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Re: New EU Banking regulation impacts investments for Swiss residents

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What is this directive?
It is part of the steps in the EU to create a single mortgage market. From an ex-pat point of view there are two challenges:

- The consumer protection side includes a requirement to comply with the consumer law in the state where the borrower resides. The bank's concern its that they are committing to legal requirements they many not know about

- If the loan is given in any currency other than that in which the income is earned, the bank effectively must underwrite any FX loose.

As it turns out the last requirement is now seen as a prevention to achieving the original objective of a single mortgage market. It is a problem in most border areas.
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