Switzerland mortgages: 1st and 2nd mortgage tranches and 5% stress test

How Swiss real estate financing works: the 67% first mortgage, 13% amortizing second mortgage, 20% equity rule, and FINMA 5% stress test.

Updated 2026-08-26 · Reviewed against Swiss Financial Market Supervisory Authority (FINMA) guidelines. · Fact-Checked Lending Norms

The two-tier mortgage system (1st and 2nd rank)

In Switzerland, home purchases are split into a 1st mortgage (up to 67% of property value) that is typically non-amortizing (interest-only), and a 2nd mortgage (from 67% to 80% LTV) that must be amortized within 15 years or before reaching retirement age (65).

FINMA affordability calculation (Tragbarkeit)

Swiss banks do not evaluate affordability at current market rates (around 1.5% to 2.0%). Instead, they require that total housing costs—calculated using an imputed stress rate of 5.0%, plus 1% ancillary costs and required amortization—do not exceed 33% of gross annual income.

The 20% equity requirement (Eigenkapital)

Buyers must contribute at least 20% of the property purchase price from savings or investments, with at least 10% coming from 'hard equity' (cash savings, securities, pillar 3a pension) and up to 10% withdrawable or pledgeable from Pillar 2 occupational pensions.

ℹ️ Statutory Notice & Methodology

Global Finance Calculator provides mathematical estimates for education, planning, and comparison — not regulated financial advice or credit pre-approval. Tax legislation, statutory central bank buffers, and underwriting criteria change. Confirm critical figures with official regulatory publications or a licensed mortgage broker before signing contracts.