Reverse mortgages in Switzerland: a solution for older borrowers
Are you unable to maintain the lifestyle to which you are accustomed on your pension? But your home is also (almost) mortgage-free? If so, a reverse mortgage can improve your financial situation. Comparis provides information about real estate pensions.
21.10.2025
1. What is a reverse mortgage or a real estate pension?
A reverse mortgage, also known as a real estate pension, is a financial product for owners of a fully—or almost fully—paid-off property.
You borrow against your home and receive a one-off or monthly pension in return. This allows you to improve your income in retirement, but still remain a property owner.
2. How do reverse mortgages work?
In contrast to a traditional mortgage, with a reverse mortgage you do not pay off the loan, but instead receive a share of the market value of your property. The mortgage is increased to approximately 50% to a maximum of 60% of the market value.
As a rule, you take out the mortgage amount as a long-term fixed-rate mortgage. You must pay interest for the entire term in advance on the capital that is freed up by the increase.
Real estate pension: example calculation
The following table shows the capital freed up by a reverse mortgage. The example is based on a property with a market value of 1,000,000 francs. The owners take out a mortgage for 50% of the market value. The term of the mortgage is ten years at an interest rate of 1.5%. When the capital is paid out, a distinction is made between a one-off payment and a monthly pension paid out over 10 years.
| Market value of the property | CHF 1,000,000 |
|---|---|
| Mortgage | CHF 500,000 |
| Interest (1.5%) | CHF 7500 |
| Interest (1.5%) for the entire term (10 years) | CHF 75,000 |
| Option 1: Paid-out capital (one-off payment) | CHF 425,000 |
| Option 2: Monthly pension (over 10 years) | CHF 3542 |
3. What are the interest rates on a reverse mortgage?
The interest rate for reverse mortgages is usually based on the level of long-term fixed-rate mortgages with a term of 10 to 15 years.
Our tip: don’t accept the first interest rate your bank offers you. There is usually a substantial difference between the benchmark rates and the best negotiated rates.
4. Real estate pension: requirements
To obtain a reverse mortgage from a financial institution, you usually have to meet the following requirements:
The minimum age of the owners is usually 60 years old.
The property must be owner-occupied.
The property must be fully—or almost fully—paid off.
The property must be in good structural condition. No renovations or refurbishments should be planned for the next few years.
Ideally, the property is in a good location that is stable in value.
The loan-to-value ratio is usually capped at 50% to 60%.
5. For whom is a reverse mortgage worthwhile in Switzerland?
Reverse mortgages are suitable for people with a low pension and few free assets. They lack liquid funds, because most of their assets are tied up in their home. In this case, it is worth considering a reverse mortgage as an alternative to selling their property.
Are you considering a reverse mortgage? If so, you should obtain comprehensive advice from experts – for example, from HypoPlus, the Comparis mortgage partner.
6. What are the advantages and disadvantages of reverse mortgages?
A reverse mortgage offers the following advantages and disadvantages:
| Advantages | Disadvantages |
|---|---|
| It boosts retirement income | Your property is mortgaged again |
| Frees up cash without you being forced to sell | Decrease in property's value can result in a loan-to-value ratio of more than 65% – leading to an extraordinary repayment or even the sale of the property |
| Affordability is not an issue for older borrowers as the mortgage itself and retained interest covers costs | |
| Refinancing at the end of the term is possible if the property increases in value |
7. When does the reverse mortgage fall due?
A reverse mortgage falls due at the end of the agreed term. This is typically between 5 and 15 years. The entire loan amount plus any accrued interest must also be repaid if the property is sold, if the borrower moves out or if the borrower dies.
The repayment is usually made by selling the house or by the borrower's heirs who can pay off the outstanding amount. If follow-up financing cannot be arranged or the property is not sold, the mortgage institution can insist that the property be sold.
Good to know: maintaining your property
Just like any other mortgage, with a reverse mortgage you must keep your property in good condition. By staying on top of maintenance, you stabilise the value of your property. If the value of your property falls significantly over time and the mortgage institute is unable to offer refinancing, your only option will be to sell the property.
8. Mortgages in old age: can I still take out a mortgage on my house as a pensioner?
With conventional mortgages, the mortgage institute checks not only the loan-to-value ratio, but also how much the borrower can . The traditional affordability calculation states that mortgage rates, repayments and maintenance must not exceed one-third of income.
However, the reduction in income after retirement means that a mortgage may no longer be affordable. Pensioners and older people may therefore find it difficult to increase or extend their mortgage.
You should therefore check in good time—from the age of 55 at the latest—whether you will still be able to afford owning a home after you retire. This will give you enough time to boost your pillar 3a or 3b savings or make up any shortfalls in your occupational (pillar 2) pension.
Up to what age can I get a mortgage?
A mortgage for people aged 65 and over is not uncommon. Providing you can afford it, you can take out a mortgage into old age.
This article was first published on 19.03.2021
