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Understanding affordability: what you can afford in a new build

The Swiss affordability rules in five minutes — with a worked example.

The basic rules

Banks calculate conservatively: an imputed rate of 5 % (not the current mortgage rate), incidental costs of 1 % of the purchase price per year, plus amortisation of the second mortgage. These housing costs may amount to at most one third of the gross income.

Equity

At least 20 % of the purchase price as equity, of which at least 10 % must be "hard" equity from outside the pension fund (savings, securities, pillar 3a).

Example

Purchase price CHF 1'000'000: mortgage CHF 800'000 → imputed interest CHF 40'000, incidental costs CHF 10'000, amortisation ≈ CHF 10'000. Total CHF 60'000 of annual costs → required gross income ≈ CHF 180'000. Equity: CHF 200'000, of which CHF 100'000 from outside the pension fund.

Why calculate early?

With a new build there are often one to two years between reservation and payment — time enough to organise the equity and compare offers. Whoever looks at the financing only when the listing appears decides under time pressure. Our advisor works through your situation without obligation.

Frequently asked questions

How much equity do I need for a new-build apartment?
At least 20 percent of the purchase price, of which at least 10 percent must come from your own funds outside the pension fund.
How is affordability calculated?
The bank uses an imputed interest rate of 5 percent on the mortgage, plus amortisation and maintenance costs of about 1 percent of the purchase price. Together these costs may not exceed one third of gross income.
Can I finance an apartment before construction starts?
Yes, when buying off plan. The bank checks affordability and the project, payments usually follow construction progress. An early financing confirmation strengthens your position with the building owner.

Guide: finding, understanding and financing a new build