First mortgage

Mortgage providers usually offer a loan-to-value ratio of 65 per cent on a first mortgage. For loan-to-value ratios between 66 and 80 per cent, some banks and insurance companies offer second mortgages, which are subordinated to the first mortgage and carry an interest rate that is around 0.5 to 1.0 per cent higher.

  • The property's value is CHF 1,000,000.
  • The bank offers a first mortgage of CHF 650,000 (65%) and a second mortgage of CHF 150,000 (15%).
  • A higher interest rate may apply to the CHF 150,000 of the second mortgage.
  • The CHF 150,000 must be paid back (amortised) before retirement age.
  • The remaining amount of CHF 200,000 must be paid by the property owner in the form of a deposit.


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