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Old 27.10.2015, 17:01
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help wiith Mortgage

So i have googled a lot about mortgage in Switzerland and tried to read all that was on this site and in general. Still i am in a fix and need some help. If someone can tell me in basic lay man language would be really helpful.

So we are looking for a property which is worth 500,000 francs and we have 100,000 savings in form of cash.

so we need a loan of 400,000 francs. we want to get this loan for shortest period of time. we also want to pay off large chunks from time to time without paying any penalty to do that. Which is the mortgage form that we should we look for?

We know we have to pay a rental income on our property every year and also that having mortgage can give us some tax benefits. But still we want to be mortgage free in shortest possible time. Since we are two earning members. I hope paying fast will not be a problem for us.

Thank you.
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Old 27.10.2015, 17:13
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Re: help wiith Mortgage

Why not ask the bank? That's what they do, they will very happily sell you a bunch of financial products to meet your needs.

In fact ask several and see who gives you the best offer.
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Old 27.10.2015, 17:15
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Re: help wiith Mortgage

Many home buyers in Switzerland use "gestaffelte Hypotheken" such as three mortgages that look like this:

a. 3 yr principal & interest: ca. 1/3 (with intention to pay it off fully in three years)
b. 5 yr principal & interest: 1/3 (with intention to roll it over in five years, but pay it off in 10 yrs)
c. 10 yr interest only: 1/3 (with intention to roll it over in 10 years for another 10 years, and possibly never pay it off)

A known disadvantage to "gestaffelte Hypotheken" is that it is often difficult to switch banks when it is time to roll over b. (and c.).

Variations on the above can include different principal amounts, instead of 1/3 each, and have some with fixed rates and some with variable rates.
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Old 27.10.2015, 17:18
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Re: help wiith Mortgage

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We know we have to pay a rental income on our property every year and also that having mortgage can give us some tax benefits.
Are you intending to rent the property out and not live in it?
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Old 27.10.2015, 17:31
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Re: help wiith Mortgage

we are going to live in it. Its for our personal use. We just want to pay off the whole loan in maximum 3-4 years.
That is why asking for the favorable mortgage plan in which we can also pay off large chunk of money without paying any extra money ( penalty) for it.

I read on a fixed interest rate i can only pay off more money towards my main capital but after paying a penalty for it.

when we know we want to pay off our whole loan quick than why not look for a mortgage plan which allows us to do that in shorter time span.
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Old 27.10.2015, 17:32
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Re: help wiith Mortgage

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we are going to live in it. Its for our personal use. We just want to pay off the whole loan in maximum 3-4 years.
That is why asking for the favorable mortgage plan in which we can also pay off large chunk of money without paying any extra money ( penalty) for it.

I read on a fixed interest rate i can only pay off more money towards my main capital but after paying a penalty for it.

when we know we want to pay off our whole loan quick than why not look for a mortgage plan which allows us to do that in shorter time span.
It's not worth it; you'll get hammered on the tax once you own the property outright. Swiss mortgages are designed to be never paid off.
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Old 27.10.2015, 17:32
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Re: help wiith Mortgage

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Are you intending to rent the property out and not live in it?
They're talking about the tax on the imputed rent.
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Old 27.10.2015, 17:34
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Re: help wiith Mortgage

No, I asked because you say you have to pay tax on rental income, but you actually are going to live in it and not rent it out. I have a mortgage and live in (I do not rent it out), but I don't pay any tax on 'rental income'.
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Old 27.10.2015, 17:35
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Re: help wiith Mortgage

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we are going to live in it. Its for our personal use. We just want to pay off the whole loan in maximum 3-4 years.
That is why asking for the favorable mortgage plan in which we can also pay off large chunk of money without paying any extra money ( penalty) for it.

I read on a fixed interest rate i can only pay off more money towards my main capital but after paying a penalty for it.

when we know we want to pay off our whole loan quick than why not look for a mortgage plan which allows us to do that in shorter time span.
If you want to fully own the property in three to four years and can make the payments, take out a mortgage that fully amortizes in three or four years.
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Old 27.10.2015, 17:35
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Re: help wiith Mortgage

Of course we will eventually ask banks. But i wanted to do my study first on it and than ask them. That is why asking here if anyone knows of such kind of mortgage. What are they called?

1. in which one can pay large sum of money back towards capital without any cost to it.
2. Loan should be could be returned in 3 or 4 or max 5 years.

Thanks!
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Old 27.10.2015, 17:36
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Re: help wiith Mortgage

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No, I asked because you say you have to pay tax on rental income, but you actually are going to live in it and not rent it out. I have a mortgage and live in (I do not rent it out), but I don't pay any tax on 'rental income'.
Well you should. Your property is assessed for a) it's value and b) it's potential rental value and you'll get taxed on both of those. However, both assessments turn out to be much lower than what they actually are. Are you indulging in a little tax avoidance, plumtree?
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Old 27.10.2015, 17:39
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Re: help wiith Mortgage

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I have a mortgage and live in (I do not rent it out), but I don't pay any tax on 'rental income'.
Yes, you do.

Tom
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Old 27.10.2015, 17:39
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Re: help wiith Mortgage

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Well you should. Your property is assessed for a) it's value and b) it's potential rental value and you'll get taxed on both of those. However, both assessments turn out to be much lower than what they actually are. Are you indulging in a little tax avoidance, plumtree?
From what figure/value does this tax start to be greater than Fr.0.-- per annum? How often is it billed? Is it billed separately from ordinary municipal/cantonal taxation returns?
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Old 27.10.2015, 17:42
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Re: help wiith Mortgage

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From what figure/value does this tax start to be greater than Fr.0.-- per annum? How often is it billed? Is it billed separately from ordinary municipal/cantonal taxation returns?
This is often referred to as "Eigenmiete". This is the ch.ch page on it:

"If you are a homeowner in Switzerland, you have to pay income tax on what is known as its ‘rental value’. The rental value theoretically represents what you as owner would receive if you rented the property to someone else, i.e. what that tenant would pay you in rent. At the same time, you can deduct mortgage interest payments and other costs for the upkeep of the property from your taxable income. Remember to take account of this when filling out your tax return."

https://www.ch.ch/en/rental-value/
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Old 27.10.2015, 17:42
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Re: help wiith Mortgage

i thought Eigenmietwert is added to our income if we own a house here. And than we pay a tax on it at the end.

May be its not in your canton. have no idea!
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Old 27.10.2015, 17:43
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Re: help wiith Mortgage

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From what figure/value does this tax start to be greater than Fr.0.-- per annum? How often is it billed? Is it billed separately from ordinary municipal/cantonal taxation returns?
You fill out a form and send it to your tax office. They will assess the property/rental value and you should enter those figures into your tax return.
On the upside, you can claim tax back on all your mortgage, amortisation and property upkeep payments.
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Old 27.10.2015, 17:44
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Re: help wiith Mortgage

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Of course we will eventually ask banks. But i wanted to do my study first on it and than ask them. That is why asking here if anyone knows of such kind of mortgage. What are they called?

1. in which one can pay large sum of money back towards capital without any cost to it.
2. Loan should be could be returned in 3 or 4 or max 5 years.

Thanks!
It seems that you want a variable length loan. Haven't heard of this in Switzerland.

VZ Vermögenszentrum writes how expensive it can be to pay back a mortgage early:

https://www.vermoegenszentrum.ch/rat...ist-teuer.html
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Old 27.10.2015, 17:47
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Re: help wiith Mortgage

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i thought Eigenmietwert is added to our income if we own a house here. And than we pay a tax on it at the end.
May be its not in your canton. have no idea!
Quote:
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You fill out a form and send it to your tax office. They will assess the property/rental value and you should enter those figures into your tax return.
On the upside, you can claim tax back on all your mortgage, amortisation and property upkeep payments.
Quote:
View Post
This is often referred to as "Eigenmiete". This is the ch.ch page on it:

"If you are a homeowner in Switzerland, you have to pay income tax on what is known as its ‘rental value’. The rental value theoretically represents what you as owner would receive if you rented the property to someone else, i.e. what that tenant would pay you in rent. At the same time, you can deduct mortgage interest payments and other costs for the upkeep of the property from your taxable income. Remember to take account of this when filling out your tax return."

https://www.ch.ch/en/rental-value/
Yes of course. 'Eigenmietwert' I am familiar with. And of course, my home, its value and all of the various deductions pertaining to the mortgage are included in my tax returns each year.
However I haven't paid any tax...
Can I assume that the deductions were greater than the potential rental income and thus I have had to pay nothing?
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Old 27.10.2015, 17:52
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Re: help wiith Mortgage

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Yes of course. 'Eigenmietwert' I am familiar with. And of course, my home, its value and all of the various deductions pertaining to the mortgage are included in my tax returns each year.
However I haven't paid any tax...
Can I assume that the deductions were greater than the potential rental income and thus I have had to pay nothing?
Yes, that is possible.

In any case both sets of numbers should be on the return, so it's easy to work out if imputed rent <> costs.
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Old 27.10.2015, 17:53
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Re: help wiith Mortgage

Contrary to what I said above, Raiffeisen has a variable interest, variable length loan. It can be cancelled with six months notice:

https://www.raiffeisen.ch/raiffeisen...2575240035B598

For offers from other banks, google on "variable hypothek".
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