Buying a property
Renting or buying: which is more worthwhile in Switzerland?
Which makes more sense: renting or buying? This question concerns many people, especially at a time of rising property prices and interest rates. Both options have their pros and cons. Comparis shows which factors play a role in this decision.
12.03.2026
iStock/Drazen Zigic
1. Renting or buying – which is right for me?
Whether you can afford to buy your own home depends to a large extent on your income and your savings. However, whether renting or buying is more worthwhile for you personally also depends on other factors.
Your willingness to take risks willingness to take risks and your need for flexibility also play an important role in choosing your future living arrangements.
What are the advantages of home ownership compared with rented properties?
Creative freedom: You can redesign, renovate or modernise your property in any way you like as long as the changes are in line with legal requirements. Tenants have little creative leeway. If they do make any alterations, they must return the property to its original state at their own expense when they move out.
Security: Homeowners don’t have to worry about the landlord giving notice to vacate. Tenants, on the other hand, can have their contracts terminated at any time subject to the notice period.
Tax advantages: Mortgage interest is currently tax-deductible, as are expenses associated with preserving the property’s value, investments in environmentally friendly and energy-saving measures, and contributions to the renovation funds of condominium associations.
Retirement provision: Usually, the mortgage is significantly reduced by the time you retire. Homeowners therefore have significantly lower housing costs than tenants in retirement.
Appreciation: Well-maintained properties in attractive locations will usually increase in value over time.
Abolition of the imputed rental value
The tax advantages (deduction of mortgage interest and value-preserving or energy-related investments) only apply under the current system. With the abolition of the imputed rental value, they are likely to be significantly reduced. However, the corresponding constitutional amendment is not expected to come into effect until 2028 at the earliest.
What are the disadvantages of home ownership compared to rented properties?
Financial resources: As a general rule, banks will only finance home purchases if you meet their affordability rules and the equity requirements. As a rule, you need to be able to pay at least 20% of the property value upfront.
Maintenance and repairs: Regular investments are required to maintain the value of a property in the long-term. For example, heating systems must often be updated to meet cantonal requirements. This is something that tenants don’t need to worry about.
Change in value: The property market is subject to fluctuations. It is possible that the property’s selling price may be less than the price you paid. If you sell at more than you paid, you will be liable for property gains tax.
Imputed rental value: Homeowners must pay tax on the imputed rental value currently as fictitious income.
Flexibility: Tenants can move home for personal or professional reasons at any time. You can end a tenancy agreement quickly, but the process of selling a property can be more protracted. You risk having to pay an early repayment charge, if you need to repay your mortgage prematurely in order to sell your home.
Can I afford to buy a home?
You will only be granted a mortgage if you meet the mortgage provider’s affordability requirements. You can easily calculate affordability and your loan-to-value ratio using the Comparis mortgage calculator.
2. Renting or buying – the pros and cons at a glance
| Pros | Cons | |
|---|---|---|
| Renting a property |
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| Buying a property |
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* On 28 September 2025, the Swiss population approved the abolition of the imputed rental value. However, the corresponding constitutional amendment is not expected to come into effect until 2028 at the earliest.
3. What are the monthly costs of renting?
The rent for a rented apartment is clearly defined at the time of signing the contract. As a result, you are unlikely to have any nasty surprises when it comes to monthly expenses in a rented apartment. For tenants, the monthly housing costs consist of:
Net rent
Ancillary costs
Deposit of up to three months’ rent or premiums for rental deposit insurance
Premiums for contents and personal liability insurance
The contents and personal liability insurance is not compulsory in most cantons, but it is strongly recommended in view of possible damage to the tenant’s possessions.
4. What are the monthly costs of buying a property?
For homeowners, housing costs include:
Expenses for repairs, maintenance and ancillary costs (including insurance premiums)
As a homeowner, you should set aside money for future renovation work, especially if you own an older building.
Example: monthly costs for home ownership
In our example, we make the following assumptions:
Property purchase price: CHF 1,000,000
Own funds: CHF 200,000
First mortgage (65%): CHF 650,000 (mortgage interest rate: 1.5%)
Second mortgage (15%): CHF 150,000 (mortgage interest rate: 2%)
| Cost item | Costs |
|---|---|
| Mortgage interest on first mortgage | CHF 9,750 |
| Mortgage interest on second mortgage | CHF 3,000 |
| Amortisation of the second mortgage | CHF 10,000 |
| Maintenance and ancillary costs (1% of the purchase price) | CHF 10,000 |
| Total cost per year | CHF 32,750 |
| Total cost per month | CHF 2’729 |
Savings potential when taking out a mortgage
Don’t accept the very first rate offered to you by your bank. There is usually a significant difference between the interest rates advertised by lenders (benchmark rates) and the best negotiated rates.
5. The alternative: rent-to-buy
Rent-to-buy is a combination of renting and (later) buying.With rent-to-buy, you enter into a tenancy agreement that also sets out an obligation to buy, or an option to buy, at a later date. The monthly rent will be credited to you should you later buy the house or apartment.
Rent-to-buy arrangements make sense especially for people who don’t otherwise have enough for a deposit.
This article was first published on 20.11.2020
