Favourable financing conditions for renovation, refurbishment or furnishings

The renovation or refurbishment of your home or the purchase of furniture and fittings up to 100,000 francs can be financed by increasing your mortgage or taking out a personal loan. Compare the most important advantages and disadvantages of the two financing options in the table below.

Taking out a personal loan is often faster and requires less formalities, while the costs are not necessarily higher over the total contract duration despite the usually higher interest rates.

Request a non-binding, free and personal loan offer now.



Mortgage vs personal loan


Variable-rate mortgage Personal loan
Loan amount

Depending on affordability & loan-to-value ratio

  • In practice, fixed-rate mortgages are only available for CHF 100,000 or more; smaller amounts are offered at variable rates

Generally up to CHF 80,000

Conditions

Interest rates for variable mortgages between 2.50% and 3.25%

  • As a rule, no new mortgages are granted for amounts below CHF 100,000
  • As a rule, only variable-rate mortgages are granted for amounts below CHF 100,000

Interest rates from 4.50% to 7.90%

  • As a rule, amounts over CHF 80,000 are no longer considered consumer credits (personal loans) and are therefore subject to special conditions
Charges & fees

Charges for additional loan and notarial services

  • Notarial costs if borrower's note must be increased
  • Additional costs depend on provider

No additional charges

  • The Consumer Credit Act (KKG) stipulates that all fees must be included in the interest rate
Purpose of loan

Renovation or refurbishment in the narrower sense

  • Purpose of use is strictly tied to the property
  • Bank carries out an impairment test on the investment
  • Offers must be presented in advance

Everything "in and around the house" (including fittings and furniture)

  • Personal loans are usually not earmarked
  • Bank does not carry out an impairment test on the investment
Time and effort required for a credit check

2 – 8 weeks

  • Full calculation of affordability and loan-to-value ratio including the time needed for the applicant to hand in all the required documents
  • New valuation of property by the bank before and after the renovation

1 – 3 days

  • Standardised credit check according to the Consumer Credit Act
  • The bank may request an extract from the land register
Disbursement conditions

Disbursement only on presentation of invoices

  • Mortgage is disbursed gradually on receipt and forwarding of corresponding invoices

Transfer of full amount at inception of the contract

  • Disbursement of full amount after a legal waiting period of 7 days
  • Loan is disbursed without the borrower having to provide evidence of work done on the property
Amortisation / repayment

Determined by the bank; can only be changed for a charge

  • Bank defines amortisation payments

Fixed monthly instalments

  • Monthly instalment comprises interest and amortisation
  • Early amortisation possible at any time and free of charge
  • It is possible to pay more than the agreed instalments at any time and free of charge
Tax implications

Deductibility of value-preserving investments

  • Value-enhancing investments are not tax-deductible
  • Distinction between value-preserving and value-enhancing investments varies from one canton to another

Deductibility of value-preserving investments

  • Value-enhancing investments are not tax-deductible
  • Distinction between value-preserving and value-enhancing investments varies from one canton to another

Please contact your mortgage lender to obtain a quote

Get a non-binding and free personal loan offer

  • Variable-rate mortgage

    Loan amount

    Depending on affordability & loan-to-value ratio

    • In practice, fixed-rate mortgages are only available for CHF 100,000 or more; smaller amounts are offered at variable rates

    Conditions

    Interest rates for variable mortgages between 2.50% and 3.25%

    • As a rule, no new mortgages are granted for amounts below CHF 100,000
    • As a rule, only variable-rate mortgages are granted for amounts below CHF 100,000

    Charges & fees

    Charges for additional loan and notarial services

    • Notarial costs if borrower's note must be increased
    • Additional costs depend on provider

    Purpose of loan

    Renovation or refurbishment in the narrower sense

    • Purpose of use is strictly tied to the property
    • Bank carries out an impairment test on the investment
    • Offers must be presented in advance

    Time and effort required for a credit check

    2 – 8 weeks

    • Full calculation of affordability and loan-to-value ratio including the time needed for the applicant to hand in all the required documents
    • New valuation of property by the bank before and after the renovation

    Disbursement conditions

    Disbursement only on presentation of invoices

    • Mortgage is disbursed gradually on receipt and forwarding of corresponding invoices

    Amortisation / repayment

    Determined by the bank; can only be changed for a charge

    • Bank defines amortisation payments

    Tax implications

    Deductibility of value-preserving investments

    • Value-enhancing investments are not tax-deductible
    • Distinction between value-preserving and value-enhancing investments varies from one canton to another

    Please contact your mortgage lender to obtain a quote

  • Personal loan

    Loan amount

    Generally up to CHF 80,000

    Conditions

    Interest rates from 4.50% to 7.90%

    • As a rule, amounts over CHF 80,000 are no longer considered consumer credits (personal loans) and are therefore subject to special conditions

    Charges & fees

    No additional charges

    • The Consumer Credit Act (KKG) stipulates that all fees must be included in the interest rate

    Purpose of loan

    Everything "in and around the house" (including fittings and furniture)

    • Personal loans are usually not earmarked
    • Bank does not carry out an impairment test on the investment

    Time and effort required for a credit check

    1 – 3 days

    • Standardised credit check according to the Consumer Credit Act
    • The bank may request an extract from the land register

    Disbursement conditions

    Transfer of full amount at inception of the contract

    • Disbursement of full amount after a legal waiting period of 7 days
    • Loan is disbursed without the borrower having to provide evidence of work done on the property

    Amortisation / repayment

    Fixed monthly instalments

    • Monthly instalment comprises interest and amortisation
    • Early amortisation possible at any time and free of charge
    • It is possible to pay more than the agreed instalments at any time and free of charge

    Tax implications

    Deductibility of value-preserving investments

    • Value-enhancing investments are not tax-deductible
    • Distinction between value-preserving and value-enhancing investments varies from one canton to another

    Get a non-binding and free personal loan offer


Tips:

Make sure that the property's maximum loan-to-value ratio has not yet been reached. If you have already borrowed the maximum amount on your property, your only remaining option is taking out a personal loan.

Early amortisation / debt conversion is possible both in case of a loan and of a mortgage and it often makes sense. Especially when your fixed-term mortgage matures, you should consider converting your debt.

If you opt for a mortgage and your bank's examination reveals that the affordability conditions have deteriorated (e.g. if your household income is lower than when you took out the mortgage), you may be required to contribute additional capital even if your payment behaviour has been irreproachable.

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