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Old 03.03.2021, 15:45
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Re: Who own the realestate in Switzerland?

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You can run some numbers on your own to get an idea but here is my take.

Let's take a CHF 1m property, which doesn't really buy anything decent in Zurich. 20% deposit (200k), a 15% amortizing mortgage (150k) and a 65% interest only mortgage (650k). I can get financing for 1% with most banks.

Your annual cashflows are: (i) interest of 8k on the 2 mortgages, (ii) home maintenance costs of 1% of the purchase price so 10k, (iii) 1% amortization of the 1st mortgage so 10k. That's total annual cashflows of 28k. Divide that by 12 months and you get 2.3k per month. Most lenders wont allow you to spend more than 1/3rd of pay on housing costs so you need monthly income of 7k.

Now here is the funny part. Apply a 5% interest rate to the above (as per the stress test that banks do) and that monthly number goes up to 5k which means you need a monthly income of 15k to qualify.

When I look at income distributions, I recon that less than 5% of the population would qualify for a mortgage on their own and roughly 20/25% would qualify as a high-earning couple...say a 2-income household where both partners make 8k each per month and have 1/no kids.

Are these income numbers before or after taxes?
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