Understanding the mortgage certificate in Switzerland

An essential element of real estate financing

Acquiring a property in Switzerland often entails the need for a mortgage due to the high prices of the market, making a cash purchase difficult. This process is generally accompanied by the creation of a mortgage certificate.

What is a mortgage certificate?

- The first rank covers two-thirds of the value of the property and has no repayment deadline.

- The second rank finances the rest and must be repaid within 15 years or before retirement.

How does a mortgage certificate work?

The mortgage certificate can exist in two forms:

- Paper certificate: also known as a security or pledge title, it must be kept carefully to avoid any loss or destruction. It can be bearer or registered.

- Virtual certificate: introduced in 2012 to avoid the risks of loss or destruction, this version is always registered and automatically recorded in the land registry.

In all cases, the certificate must be entered in the land registry and validated by a notary.

In the event of a sale of the property, the certificate can be resold or transferred free of charge to the new owner. It can also be kept for a future purchase in the same canton, adjusted as needed according to the amount of the new loan. This continuity can make it possible to save on the costs of creating a new certificate.

If you are considering increasing your mortgage, to finance renovations for example, the certificate can be modified. A change of lender may also require an update of the certificate.

The cost of a mortgage certificate?

Creating a mortgage certificate generates costs, varying according to the canton and the municipality where the property is located. These costs can represent between 0.1% and 0.3% of the amount of the certificate. For a property valued at CHF 1,000,000 with a loan of CHF 800,000, the costs could range from CHF 800 to CHF 2,400.

Navigate the world of mortgages with confidence with our team of real estate financing experts

If you have questions or need specialized advice on real estate financing, do not hesitate to call on our team of experts. At Homewell, we understand that navigating the field of mortgages and mortgage certificates can be complex and often intimidating. That is why we are committed to offering you clear and detailed assistance at every step of your real estate project.

Our team is made up of professionals experienced in real estate financing, ready to provide you with precise answers and to help you optimize your financing strategy. Whether you are considering buying your first home, investing in a property or renegotiating an existing mortgage, we are here to simplify the process and maximize your investment.

Contact us today to schedule a free consultation. We look forward to working with you and making your real estate dream a reality. At Homewell, your real estate future begins with a trusted partner by your side.

For any questions or requests for further information, please do not hesitate to contact us!