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Old 18.08.2019, 15:38
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Swiss bank leanding for real estate in EU country

Would Swiss bank lend money to purchase an apartement in EU country? The lender is employeed in CH and has permit B.
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Old 18.08.2019, 15:55
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Re: Swiss bank leanding for real estate in EU country

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Would Swiss bank lend money to purchase an apartement in EU country? The lender is employeed in CH and has permit B.
I think you mean the borrower not the lender.

A) If the property is within 50km of the Swiss border, perhaps.
B) If the loan is secured on assets that can be pledged in Switzerland i.e. a securities portfolio, yes. And then it isn‘t really a mortgage, it‘s a Lombard.

Otherwise, it‘s too risky for the bank.
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Old 19.08.2019, 14:30
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Re: Swiss bank leanding for real estate in EU country

In my experience the answer has been no.
You'll also probably get a no from any other bank in Europe as they were burned not that long ago when a significant count of mortgage holders defaulted on mortgages denominated in currencies other than the country where the property was located.

There is also an EU directive preventing mortgages being granted to non Euro earners for property in EU.
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Old 19.08.2019, 14:37
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Re: Swiss bank leanding for real estate in EU country

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There is also an EU directive preventing mortgages being granted to non Euro earners for property in EU.

Lucky I got that mortgage set up before that.....!
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Old 19.08.2019, 14:50
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Re: Swiss bank leanding for real estate in EU country

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There is also an EU directive preventing mortgages being granted to non Euro earners for property in EU.
However if the bank is in Switzerland then it would have nothing to do with the EU. It is definitely still possible to get a mortgage with a Swiss bank for an EU property. Yes some banks have stopped doing it, but this not a general rule or a law.

Can you link to the directive? I really don't see how it can be enforced.
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Old 19.08.2019, 15:57
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Re: Swiss bank leanding for real estate in EU country

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There is also an EU directive preventing mortgages being granted to non Euro earners for property in EU.
Have another read of the directive or perhaps your first read... What it actually does is disadvantage an institution who provides a mortgage in a currency other than that in which the borrower earns their income in favor of the borrower. So the banks don’t like it.
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Old 19.08.2019, 16:04
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Re: Swiss bank leanding for real estate in EU country

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Have another read of the directive or perhaps your first read... What it actually does is disadvantage an institution who provides a mortgage in a currency other than that in which the borrower earns their income in favor of the borrower. So the banks don’t like it.
Exactly. Most cross-border commuters will have their salaries in CHF and as such will have a mortgage in CHF with a Swiss bank. The only connection with the EU is that that is where the property they are going to buy and live in is.
Definitely no restriction on this.
In fact if you live in CH and want to buy a property in the EU, it will probably be even easier for you than if you're a cross-border worker.
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Old 19.08.2019, 17:36
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Re: Swiss bank leanding for real estate in EU country

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Exactly. Most cross-border commuters will have their salaries in CHF and as such will have a mortgage in CHF with a Swiss bank. The only connection with the EU is that that is where the property they are going to buy and live in is.
Definitely no restriction on this.
In fact if you live in CH and want to buy a property in the EU, it will probably be even easier for you than if you're a cross-border worker.
Yes. This is my problem. I can't get mortage in my homeland because I don't earn in local currency of my country (non-Eurozone country). I earn in CHF and wanted to get mortage from Swiss bank since interest rates are so low here.
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Old 19.08.2019, 17:38
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Re: Swiss bank leanding for real estate in EU country

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Yes. This is my problem. I can't get mortage in my homeland because I don't earn in local currency of my country (non-Eurozone country). I earn in CHF and wanted to get mortage from Swiss bank since interest rates are so low here.
Where is the property?
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Old 19.08.2019, 17:46
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Re: Swiss bank leanding for real estate in EU country

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Where is the property?
In Poland
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Old 19.08.2019, 17:50
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Re: Swiss bank leanding for real estate in EU country

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In Poland
Then it could prove trickier. Were the property (as mentioned before) in a neighbouring country and close to the Swiss border, it would have been possible, with certain banks. For a property further away or in a non-bordering country, it may well be harder to obtain.
Perhaps roegner can suggest a bank?
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Old 19.08.2019, 19:07
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Re: Swiss bank leanding for real estate in EU country

Ask your local bank here to introduce you to a local bank in Poland.

That is how it worked for me.
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Old 20.08.2019, 12:44
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Re: Swiss bank leanding for real estate in EU country

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However if the bank is in Switzerland then it would have nothing to do with the EU. It is definitely still possible to get a mortgage with a Swiss bank for an EU property. Yes some banks have stopped doing it, but this not a general rule or a law.

Can you link to the directive? I really don't see how it can be enforced.
Credit Suisse: Non.
UBS: Nein.

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Old 20.08.2019, 12:46
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Re: Swiss bank leanding for real estate in EU country

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Have another read of the directive or perhaps your first read... What it actually does is disadvantage an institution who provides a mortgage in a currency other than that in which the borrower earns their income in favor of the borrower. So the banks don’t like it.
Maybe so, either way the net effect is the same to me. Can't get a mortgage from them.
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Old 20.08.2019, 12:46
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Re: Swiss bank leanding for real estate in EU country

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Credit Suisse: Non.
UBS: Nein.

I knew about UBS but not about CS. Nevertheless, those are just two. But Switzerland has hundreds of banks...
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Old 20.08.2019, 12:50
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Re: Swiss bank leanding for real estate in EU country

I believe this is the particular article of the directive:

"Foreign currency loans

Art. L226-18 of the consumer code

Creditors are required to implement measures to protect customers from foreign exchange rate risks, e.g., through giving the borrower the right to convert the loan into a different currency or through other arrangements such as caps.

A warning shall be provided to the customer where the value of the outstanding amount payable or the value of the regular installments varies by more than 20 percent from what it would be if the exchange rate between the currency of the credit agreement and the currency of the member state applicable at the time of the conclusion of the agreement were applied.

The definition of what constitutes a “foreign currency loan” is quite broad under the law, as it is any credit:

Denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid; or
Denominated in a currency other than that of the member state in which the consumer is resident."
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Old 20.08.2019, 12:54
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Re: Swiss bank leanding for real estate in EU country

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In fact if you live in CH and want to buy a property in the EU, it will probably be even easier for you than if you're a cross-border worker.
...with a Swiss bank specifically, right?

not my experience to date.
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Old 20.08.2019, 12:55
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Re: Swiss bank leanding for real estate in EU country

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I believe this is the particular article of the directive:
"Foreign currency loans
Art. L226-18 of the consumer code
Creditors are required to implement measures to protect customers from foreign exchange rate risks, e.g., through giving the borrower the right to convert the loan into a different currency or through other arrangements such as caps.

A warning shall be provided to the customer where the value of the outstanding amount payable or the value of the regular installments varies by more than 20 percent from what it would be if the exchange rate between the currency of the credit agreement and the currency of the member state applicable at the time of the conclusion of the agreement were applied.

The definition of what constitutes a “foreign currency loan” is quite broad under the law, as it is any credit:

Denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid; or
Denominated in a currency other than that of the member state in which the consumer is resident."
That doesn't seem to indicate a ban however.

Cross-border workers for example earn in CHF and will typically have a mortgage for a house in say Germany but also in CHF. If the Swiss franc weakens or if the Euro strengthens, the mortgage or repayment thereof is unaffected by the exchange rate turbulence.
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...with a Swiss bank specifically, right?
not my experience to date.
SHKB still do and I believe that Clientis may still do as well. We looked into it a couple of years ago. In the end we didn't go with either, we went with an EU bank. My mortgage however is in CHF for the simple reason that my main income is in CHF.
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Old 20.08.2019, 12:58
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Re: Swiss bank leanding for real estate in EU country

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That doesn't seem to indicate a ban however.

Cross-border workers for example earn in CHF and will typically have a mortgage for a house in say Germany but also in CHF. If the Swiss franc weakens or if the Euro strengthens, the mortgage or repayment thereof is unaffected by the exchange rate turbulence.


SHKB still do and I believe that Clientis may still do as well. We looked into it a couple of years ago. In the end we didn't go with either.
Yes agreeed, the FX risk is non existent in the case you describe.
I'll try those 2, thanks.
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Old 20.08.2019, 13:55
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Re: Swiss bank leanding for real estate in EU country

The long story short: If you happen to be a wealth management client with at least a few million in the bank and this property in Poland you talk about is some sort of castle: no problem.

If you are an average Joe and you want to buy a flat in your hometown as a long term investment: forget it, talk to a Polish bank instead.
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