Taking out a mortgage: 7 simple steps
If your dream of owning a home is getting closer, you should think about arranging a mortgage. Comparis guides you through 7 steps to your new mortgage.
15.08.2025
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1. Clarify your needs and budget
Do you want a new house in the countryside? Or are you dreaming of an apartment in the city? First, decide on the criteria for your new home.
You should also carefully calculate your budget as a first step. Two points are important to bear in mind here: your assets and your income.
In Switzerland, you usually need to pay a down payment of 20% in equity to finance a property. No more than half of this (10%) may come from an early withdrawal of your pension assets. You can take out a mortgage for the remaining 80%. The lender will check the affordability and loan-to-value ratio of the mortgage. This way, the lender can make sure that you can afford the mortgage.
You can easily calculate the affordability and loan-to-value ratio using the Comparis mortgage calculator.
In addition to the down payment for property financing, you should have some reserves for unexpected costs (e.g. due to a renovation that suddenly becomes necessary). As a rule of thumb, you should set aside at least 5% of the property’s value as a liquid reserve.
No one wants to be in debt. Nevertheless, refraining from taking out a mortgage is not necessarily the best option.
In Switzerland, it can actually be advantageous to keep some of the property’s value as a mortgage instead of paying it off in full.
This is due to the imputed rental value. This is considered fictitious income and is treated as additional income for tax purposes. If you maintain a mortgage, you can deduct the mortgage interest from your taxable income. This can reduce your tax burden.
2. Monitor interest rates and compare lenders
The lower the mortgage rates, the lower your housing costs, so check the mortgage rates offered by lenders regularly. You’ll find that the mortgage rates on offer vary depending on the term and the lender.
3. Decide which type of mortgage suits you best
Before you take out a mortgage, you have to choose a model. You can choose from the following mortgage models:
| Mortgage model | Features | Who may find this mortgage model interesting? |
|---|---|---|
| Fixed-rate mortgages | Fixed term (usually 2–10 years). Early termination is often only possible for a fee. Fixed interest rate. | A fixed-rate mortgage is suitable for people who value planning security and are less willing to take risks. |
| Saron mortgages | No fixed interest rate, it is continuously adjusted to reflect market conditions. | A Saron mortgage is suitable for people who want to save when interest rates fall. The condition is that you can financially bear possible interest rate fluctuations. |
| Variable-rate mortgages | Variable interest rate. It can usually be terminated at any time. | A variable-rate mortgage is suitable for people who want maximum flexibility (e.g. if they plan to sell their property) or as a temporary solution before switching to another model. |
Good to know: you can also combine different mortgages. However, this can make it more difficult to switch to another financial institution when renewing the mortgage.
4. Find a suitable lender
Finding the right financing partner for your property is an important step on the way to owning a home. You can get a mortgage not only from banks, but also from pension funds, insurers and investment foundations. The mortgage rates can sometimes vary significantly between lenders.
It’s best to seek advice from an independent specialist. Our mortgage partner HypoPlus can help you find the right financing partner. Important: start your search for a lender in good time.
5. Negotiate the terms
Once you have obtained your quotes, another key step begins: negotiating the conditions. After all, mortgage rates are not set in stone – there is room for negotiation.
Don’t settle for the first deal you find. Don’t rush into taking out a mortgage.
For example: even an interest rate difference of 0.2% over a ten-year term and a mortgage amount of 500,000 francs means a saving of around 10,000 francs.
Negotiating a mortgage with the bank: our tips
Here are some tips on how to negotiate your mortgage terms successfully:
Get several quotes: mention during the negotiation that you have obtained several quotes. Banks are then often more willing to offer you better conditions.
Submit a complete and clear application: experience shows that financial institutions will take you more seriously as a negotiating partner. You can find out what should be included in the application in our document checklist.
Use your credit score and down payment as negotiating leverage: a good credit standing, a stable income and a relatively high down payment will strengthen your negotiating position. The lower the risk for the bank (e.g. due to a lower loan-to-value ratio), the more likely you are to receive better interest rates.
Also negotiate the ancillary conditions: as a rule, you can negotiate not only the interest rate, but also flexibility, amortization, special repayments, any fees and costs for early repayment.
Good to know: the negotiation date is not definitive
Often, the date of the negotiation is not the same as the final date of entering the mortgage agreement. If market interest rates rise in the meantime, the bank may also increase your mortgage interest rates. This is because the agreed interest rate is usually only finalized when the contract is concluded.
6. Take out your mortgage
Found your dream home? Have you come up with a suitable financing strategy and found a possible financing partner? Then nothing stands in the way of taking out a mortgage.
Important: the purchase contract must be notarized to be valid. Find out from your commune or canton how the notary offices operate.
7. Consider your refinancing options
You should start thinking about your refinancing options around 18 months before your current mortgage comes to an end. It may make financial sense to switch lender.
Even a fixed-rate mortgage needs to be terminated, despite already having a set end date. If you don’t take any action, your expiring fixed-rate mortgage will usually be converted into a variable-rate mortgage. Also, you won’t be able to switch to another lender straight away. Review your contract and the specified notice period. The notice period is usually three to six months.
This article was first published on 09.01.2021
