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Old 19.01.2021, 14:19
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Mortgage Affordability Calculations

Quick question on mortgage affordability criteria used by lenders when applying for a swiss mortgage on a swiss property.

Do they take base pay & bonus into account or only base pay? Would they also consider rent from a UK property as income or do they just look at the UK mortgage and take this off what you could afford / what they're willing to lend?

Also what level of evidence is needed, eg 12 months base pay & a single annual bonus statement or multiple years?

Would this vary lender to lender or is it fairly standard across the board?

I've searched previous forum posts but can't find anything - apologies if this has already been asked
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Old 19.01.2021, 14:56
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Re: Mortgage Affordability Calculations

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Quick question on mortgage affordability criteria used by lenders when applying for a swiss mortgage on a swiss property.

Do they take base pay & bonus into account or only base pay? Would they also consider rent from a UK property as income or do they just look at the UK mortgage and take this off what you could afford / what they're willing to lend?

Also what level of evidence is needed, eg 12 months base pay & a single annual bonus statement or multiple years?

Would this vary lender to lender or is it fairly standard across the board?

I've searched previous forum posts but can't find anything - apologies if this has already been asked
I got my mortgage with UBS. They don't take bonus into account because it's not guaranteed. In terms of evidence, I provided a copy of my work contract and tax returns.
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Old 19.01.2021, 15:09
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Re: Mortgage Affordability Calculations

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I got my mortgage with UBS. They don't take bonus into account because it's not guaranteed. In terms of evidence, I provided a copy of my work contract and tax returns.
Thanks for the reply - did you need multiple years tax return evidence or was a single year sufficient?
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Old 19.01.2021, 15:09
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Re: Mortgage Affordability Calculations

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I got my mortgage with UBS. They don't take bonus into account because it's not guaranteed. In terms of evidence, I provided a copy of my work contract and tax returns.
they will if it's significant and fairly consistent. also foreign income is fine. there are no hard and fast rules. better to talk to the bank than EF....
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Old 19.01.2021, 15:12
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Re: Mortgage Affordability Calculations

On the two occasions we've taken out Swiss mortgages this affordability criteria was never raised with us. Sure, before signing on the dotted line they needed to see proof of earnings, as well as bank statements and extracts from the debt register, but there was never really a question of could we afford it, just whether they considered us a good risk or not. But they never asked us about other credit, like the French mortgage we were still paying the first tome round.

It seemed very much like the question of affording it was our business, not their's, and that they didn't see it as their job to tell us how much we could or could not afford to pay.
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Old 19.01.2021, 15:32
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Re: Mortgage Affordability Calculations

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On the two occasions we've taken out Swiss mortgages this affordability criteria was never raised with us. Sure, before signing on the dotted line they needed to see proof of earnings, as well as bank statements and extracts from the debt register, but there was never really a question of could we afford it, just whether they considered us a good risk or not. But they never asked us about other credit, like the French mortgage we were still paying the first tome round.

It seemed very much like the question of affording it was our business, not their's, and that they didn't see it as their job to tell us how much we could or could not afford to pay.
That's interesting - did that mean you were able to exceed the 33% of salary limits I've seen on various online mortgage calculators?
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Old 19.01.2021, 15:34
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Re: Mortgage Affordability Calculations

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That's interesting - did that mean you were able to exceed the 33% of salary limits I've seen on various online mortgage calculators?
I've no idea. We never looked at anything like that. I always had the impressions that those were only guidelines, not hard and fast rules such as used to be applied in the UK back in the day.
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Old 19.01.2021, 15:47
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Re: Mortgage Affordability Calculations

Be aware, different mortgage providers use different information and they also rank for risk based on your financial situation.

For some providers, giving them more information (demonstrating more wealth /income) will give you a lower risk rank and therefor a lower interest rate.
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Old 19.01.2021, 18:11
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Re: Mortgage Affordability Calculations

My experience via Raiffeisen, UBS and ZKB, annual fixed salary, plus the average of the last 3 years bonus, although they might "round down" the bonus to be a bit more conservative.

Rental income will be added.

Partner (wife's) income will also be added. In my case she was taking time out to stay home with the kids and had "planned" to seek employment soon, and even there they sort of added a % of her previous income.

Even if the repayment is already less than 33%, as Jazh mentioned, the more info you give that makes you look good you will get better interest rates.

However, all the income will be added together for that 33% calculation. You cannot say that the rental income should be counted 100%. Even if 100% of that rental income goes straight into your savings account, the rule simply says 33% of all income.

There are indeed rules, but given how they handled my bonus and my temporary out-of-work wife's income, I think you should check with different banks...
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