From renting to owning, Swiss mortgage rates explained for expats

Maybe you just started a new job in Zurich, moved to Lausanne six months ago, or your kids are enrolled in an international school in Geneva, and you're wondering if it's time to stop renting and buy a home.

The good news, mortgages are possible for expats. The less good news, Swiss banks are cautious. You’ll need at least 20% of the purchase price as equity, half of that must be in cash already on your account. No pension funds, no future bonuses.

On top of that, your monthly mortgage costs can’t exceed one-third of your gross income. And that’s calculated based on a theoretical interest rate of 5%, not the current rate. Why? Banks want to see if you could still afford the property if rates go up.

Can expats get a mortgage in Switzerland?

Yes. If you live and work in Switzerland, you can get a mortgage just like Swiss nationals.

It’s pretty straightforward, if you have a B or C permit. For citizens of the EU or EFTA, the requirements are almost the same as for locals.

It gets trickier without permanent residence. In that case, the “Lex Koller” federal law applies, which makes buying property, especially holiday homes, more complex.

If you live in Switzerland and have a stable job, legal obstacles are few. The bigger hurdle is usually the bank, do you have enough equity? Is your credit solid? Is the financing sustainable?

What are mortgage interest rates in Switzerland in 2025?

Lower than they’ve been in years, 10-year fixed mortgages start at around 1.55%.

In 2025, the interest rate curve has dipped. The Swiss National Bank cut rates, and that’s having an effect.

Here are the average rates (as of May 2025):

Source: https://en.comparis.ch/hypotheken/default

But beware, these aren’t guaranteed. Your personal rate depends on factors like the loan-to-value ratio, your creditworthiness, and the mortgage model you choose.

Fixed, variable or SARON, which mortgage is right for me?

If you’re new to mortgages, terms like “fixed rate” or “SARON” might sound confusing. Don’t worry, we’ll break it down.

Switzerland has three main types of mortgages. They differ in how the interest rate behaves, meaning how much the loan costs over time and whether the amount can change.

1. Fixed mortgage, stable interest, full planning security

A fixed mortgage is like a rental contract with a fixed rent, only for financing. You agree with the bank on an interest rate that stays unchanged for a set period, such as 5, 10, or 15 years.

Pros:

• You know exactly what your monthly payments will be.

• Even if market rates go up, your rate stays the same.

Cons:

• You don’t benefit if rates drop.

• Ending the contract early (e.g., if moving abroad) can be expensive.

Best for:

People who want stability and plan to stay in Switzerland long term, like families or those with a clear housing plan.

2. Variable mortgage, flexible, but rarely offered

Variable mortgages are an older model. There’s no fixed term or rate. The bank can change the rate depending on the market, usually with some advance notice.

Pros:

• Very flexible, often cancellable with 3 or 6 months’ notice.

• Sometimes cheaper than fixed, but not always.

Cons:

• Costs can change at any time, hard to plan.

• Many banks no longer actively offer them, as SARON is the modern alternative.

Best for:

Very flexible people with stable incomes who can handle risk and adapt quickly.

3. SARON mortgage, modern, flexible, cheaper (but less predictable)

SARON stands for “Swiss Average Rate Overnight”, a reference rate based on the Swiss money market. A SARON mortgage works like a variable one but is more structured and transparent.

The interest rate is updated every few months based on SARON movements. So if market rates fall, you pay less, if they rise, you pay more.

Pros:

• Usually cheaper than fixed, especially if rates stay low.

• Flexible, often cancellable with 3 months’ notice.

Cons:

• No fixed monthly cost, payments can change.

• Sudden rate hikes mean higher costs.

Best for:

Financially stable people who can handle short-term volatility, like couples without kids or high-earning professionals.

Which mortgage is best for me as an expat?

It depends entirely on your situation:

Many also choose a mix, for example, 60% fixed, 40% SARON, to balance planning security and flexibility.

Remember, mortgages are not one-size-fits-all. Every financing plan should reflect your life. And no article, however detailed, can replace a personal consultation.

Run realistic scenarios, what if rates go up 2%? Can you still afford it? What if you return to London, Berlin, or Milan in five years? Is the mortgage still manageable? Can it be ended early, and on what terms?

There’s no universal answer. It depends on your income, residence permit, family status, and tax situation.

This article does not constitute financial advice.

It is for informational purposes only. Always speak to a qualified advisor before taking out a mortgage.

How can I get the best mortgage rate as an expat?

It comes down to three things, preparation, comparison, negotiation.

• Get multiple offers, banks, insurers, and pension funds all offer mortgages, often with big differences.

• Polish your credit, no new debts before applying. Show more than 20% equity, it signals commitment.

• Use special deals, discounts may be available for energy-efficient homes, first-time buyers, or certain professions.

• Watch interest trends, but don’t overthink. Base decisions on your real life, not your gut feeling.

How can Alpian support me in financing a home?

Alpian is your bank if you’re looking for borderless banking and advice that really understands you.

Thanks to our partnership with Resolve, an independent Swiss mortgage broker, you benefit from:

• A free first consultation (value, CHF 800)

• Fast assessment of your financing potential

• Access to over 70 providers

• Optimized solutions including pension-linked strategies (3rd pillar, pension fund)

Result: up to 0.5% lower interest rates, that’s CHF 4,000 a year on an CHF 800,000 mortgage.

What legal and tax issues should expats be aware of?

Not everything that’s allowed is simple.

• With a B or C permit, you’re allowed to buy residential property, if you live in Switzerland.

• Without residency, you’ll need a special cantonal permit and can only buy specific types of property, for example, holiday homes.

Additional costs:

• Notary and land registry fees

• Property transfer tax (1–3%, depending on canton)

• Closing costs of 2–5%, not mortgage-eligible

Taxes:

You’ll need to declare the imputed rental value of your home, but you can deduct mortgage interest and maintenance costs. This can be optimized, with the right advice.

What should I keep in mind long term?

Buying today means planning for tomorrow.

Ask yourself:

• How long do I plan to stay in Switzerland?

• What if I move or sell?

• How does this fit into my retirement planning?

• Is the mortgage still affordable in retirement?

• And yes, a mortgage is more than a contract. It’s part of your life strategy.

Conclusion, what really matters when buying a home in 2025?

Mortgages in Switzerland in 2025 are attractive, but they’re not simple.

As an expat, you have access to the market and benefit from low rates. But clear information and smart planning are essential. And most of all, your solution should fit your life.

If you don’t have a dedicated advisor yet, Alpian clients can speak with our partner Resolve. They’ll assess your specific situation, evaluate risks and affordability, and find the mortgage that’s right for you.