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-   -   Can I take out a mortgage in Switzerland for a property abroad? (https://www.englishforum.ch/finance-banking-taxation/295944-can-i-take-out-mortgage-switzerland-property-abroad.html)

Phillip8134 02.01.2020 14:58

Can I take out a mortgage in Switzerland for a property abroad?
 
The interest rates are low for online Mortgages in Switzerland. Can anyone advise if these mortgages are only allowed for property in CH or can they be used for property abroad? Thank for any answers.

roegner 02.01.2020 15:02

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

Originally Posted by Phillip8134 (Post 3133620)
The interest rates are low for online Mortgages in Switzerland. Can anyone advise if these mortgages are only allowed for property in CH or can they be used for property abroad? Thank for any answers.

You can start reading here:

https://www.englishforum.ch/finance-...u-country.html

Troublawesome 02.01.2020 15:09

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
For non neighboring countries like Germany, Italy, France and Austria definitely not.

For one of those 4, you have very slim chances but not impossible. Your bank is your first point of contact as each is different, I'd guess the bigger the bank the most probably it could be.

Neko 02.01.2020 15:49

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Swiss mortgages are generally for Swiss real estate. But there are a few exceptions if you earn Swiss francs, eg for "frontaliers".


There are also some EU countries like Poland, Hungary etc where some have taken out Swiss franc mortgages precisely because the interest rate is low. But this is with local banks and has led to misselling scandals and is still a potential source of future problems should the Złoty or Forint fall in value because the debt to repay effectively increases.


Generally unless you've got a great reason, try to match your assets and liabilities, eg a house in a country funded by debt from the same place/currency... or you expose yourself to risks you might not bargain for :eek:

robBob 02.01.2020 16:29

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Assume OP is not from Poland
https://www.reuters.com/article/us-p...-idUSKBN1WE044
:rolleyes:

LuganoPirate 02.01.2020 16:49

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
If you have assets at the bank, or plenty of equity in swiss real estate, the bank may give you a loan secured on those assets with which to buy a property overseas.

It's probably easier just to apply for the mortgage in the country where you wish to buy the property. As long as you are creditworthy and fulfil the local requirements, there is no reason why it won't be granted.

Guest 02.01.2020 18:18

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

Originally Posted by Phillip8134 (Post 3133620)
The interest rates are low for online Mortgages in Switzerland. Can anyone advise if these mortgages are only allowed for property in CH or can they be used for property abroad? Thank for any answers.




If you got enough collateral the bank doesn't really care where the property is (think 110% of the mortgage)

Jim2007 02.01.2020 22:26

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

If you got enough collateral the bank doesn't really care where the property is (think 110% of the mortgage)
Then it is not a mortgage, it's a 'back to back' loan and comes with a lot of restrictions. if you meet the conditions, then you probably would not need the loan in the first place. It is usually done as part of some kind of tax planning exercise.

Jim2007 02.01.2020 22:30

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

Originally Posted by Neko (Post 3133627)
There are also some EU countries like Poland, Hungary etc where some have taken out Swiss franc mortgages precisely because the interest rate is low. But this is with local banks and has led to misselling scandals and is still a potential source of future problems should the Złoty or Forint fall in value because the debt to repay effectively increases.

The EU directive makes this pretty much impossible now. The quick summary is that if a bank give you a mortgage loan for a property in the EU and it is not in the same currency as that which you are paid in, then they are left very exposed for the FX consequences of the loan.

Guest 03.01.2020 09:14

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

Originally Posted by Jim2007 (Post 3133715)
Then it is not a mortgage, it's a 'back to back' loan and comes with a lot of restrictions. if you meet the conditions, then you probably would not need the loan in the first place. It is usually done as part of some kind of tax planning exercise.




Not necessarily.

catandmouse 03.01.2020 11:22

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Some years I enquired about mortgage loans for a frontalier property. Our bank explained this would be done through a French bank and both would be taking their cut on the loan, to cover their respective risk.
The advantage of taking the loan on the Swiss bank is the low interest rate, but there was a premium to cover the currency risk.
In other words it can be done, but each bank will decide whether it wants to take this on and how it will deal with it.

Don Molina 03.01.2020 13:01

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
Quote:

Originally Posted by Jim2007 (Post 3133719)
The EU directive makes this pretty much impossible now. The quick summary is that if a bank give you a mortgage loan for a property in the EU and it is not in the same currency as that which you are paid in, then they are left very exposed for the FX consequences of the loan.

The bank would not be exposed - it hedges the FX.

The client is exposed, and that's the purpose - if you think that the loan currency will get cheaper you can exercise that view by taking that loan.

Then there is the discussion - should one try and take a position on their FX view, with the single largest investment of their lives?
Let's not forget that for most people, buying a house is going all-in with leverage :eek:

Horatio Gonzales 03.01.2020 13:02

Re: Can I take out a mortgage in Switzerland for a property abroad?
 
I've been around the block on this one & the answer was no in all cases before even getting into details with me.


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