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- At least 20% equity is required to buy a house in Switzerland, with around a third being ideal.
- The running costs should make up a maximum of one third of gross income in order to remain sustainable in the long term.
- Despite low interest rates, the real estate market will remain price-stable in 2025 – attractive conditions for buyers, but also opportunities for owners to review their market value.
If you are considering buying a house in Switzerland, the central question quickly arises: how much equity is required, what income is required and what is considered acceptable financing today? The requirements have changed in recent years, but remain clearly defined. The following overview shows what sums should realistically be expected – and what owners who are thinking about selling or reinvesting should also pay attention to.
Rule 1: Estimate gross income and purchase price correctly
Before comparing real estate offers or discussing financing, it is worth taking a realistic look at your own income. The rule of thumb in Switzerland is that your annual gross income should be at least around 18% of the purchase price.
Example: If you earn CHF 100,000 a year, you can afford a property worth around CHF 550,000 according to this rule of thumb. This calculation does not yet take into account a mortgage, but serves as a guide to check affordability.
As most financing is based on two mortgages , income remains a key factor: the first mortgage usually covers 65 – 75% of the purchase price, the second is reduced through amortization. This means that the more stable the income, the more flexible the financing options.
Current situation (as of November 2025):
The mortgage reference interest rate is 1.25% and the SNB key interest rate is 0%. This ensures moderate financing costs, but does not change the banks’ basic affordability tests. (SNB, ZKB)
Rule 2: At least 20% equity – better more
Equity remains crucial when buying a house in Switzerland. Banks generally require at least 20% of the purchase price as equity. This sum can consist of:
- savings or securities,
- Gifts or inheritances,
- interest-free loans from relatives,
- or an early withdrawal from the pension fund (Pillar 2 or Pillar 3a)
originate. The latter option should be carefully considered, as it can have a long-term impact on retirement provision.
The higher the equity share, the more favorable the conditions. This is because a lower risk for the bank usually means lower interest rates. Around one third equity is ideal.
Tip: If you do not (yet) have sufficient funds, you can significantly improve your own position with targeted savings via pillar 3a and early planning. At the same time, purchase prices remain high in most regions – a fact that owners should also bear in mind when thinking about selling or reinvesting.
Rule 3: Realistically calculate running costs
Running costs are added to the purchase price. These include:
- Mortgage interest
- Amortization
- Maintenance and repairs
- Ancillary costs and insurance
As a guideline, these expenses should not exceed one third of gross income. Otherwise, housing is no longer considered financially viable.
On average, the annual housing costs with 20% equity are around 5 – 6% of the purchase price. The exact amount depends on the interest rate, location and condition of the building.
Example:
For a single-family home with a purchase price of CHF 700,000, this results in:
Equity: CHF 140,000
Running costs (≈ 5%): CHF 35,000 per year / around CHF 2,900 per month
To keep the burden below one third, the household income should be at least CHF 105,000 per year.
Rule 4: Plan for equity reserves
In addition to equity, buyers should factor in additional reserves – ideally 5 – 10% of the purchase price. These serve as security for:
- Notary and land registry fees
- Any renovations
- Valuation or relocation costs
- unexpected events (e.g. loss of income)
The market value can also deviate slightly from the bank valuation – in such cases, a financial buffer helps to secure the financing nonetheless.
Market environment 2025: favorable financing, high prices
Despite low interest rates, prices are remaining stable or rising slightly in many regions. According to the Wüest Partner Real Estate Market Report 2025, the average price for single-family homes in Switzerland is currently around CHF 8,700 per m², in some cases significantly higher in urban regions.
While the low interest rate creates opportunities for buyers, it also leads to high demand – which supports prices. For owners, in turn, this can be an ideal time to review the market value of their own property or to consider reinvesting.
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Conclusion: Planning is the key to a successful home purchase
Buying a house in Switzerland in 2025 will remain challenging, but feasible – provided the financing is realistically structured.
- Equity: at least 20%
- Income: around 18% of the purchase price
- Running costs: maximum â…“ of gross income
- Reserves: additional 5 – 10%
All data are without guarantee. The information on these Internet pages has been carefully researched. Nevertheless, no liability can be accepted for the accuracy of the information provided.
FAQ
Can I buy a house with less than 20% equity?
Theoretically yes – in practice it is more difficult. Banks are allowed to finance a maximum of 90%, but many institutions only grant mortgages with at least 20% equity. Interest rates rise sharply below 20% and an advance withdrawal from a pension fund is mandatory. In addition, affordability is checked more strictly.
Can I use pension fund assets to buy a house?
Yes. Funds from the 2nd pillar or pillar 3a can be used for home ownership promotion (WEF). However, an early withdrawal reduces the later pension. Alternatively, the pension fund can be pledged to increase own funds without withdrawing capital.
What additional costs are incurred when buying a house in Switzerland?
Depending on the canton, there are additional costs of 1.5-5% of the purchase price. These include notary fees, land registry fees and, in some cantons, transfer tax. These costs are in addition to the equity capital.
How high are the running costs of home ownership?
A guideline value is 5-6% of the purchase price per year, depending on the mortgage interest rate, location and condition of the building. This includes interest, maintenance, ancillary costs and amortization. This burden should be examined in relation to income.
Is it worth buying a house in 2025 despite high prices?
Despite high purchase prices, the environment is attractive thanks to low interest rates. Demand remains high, supply scarce. Those who have sufficient equity, stable income and reserves will benefit in the long term – both in terms of the purchase price and the income.