A household in Switzerland earning CHFa year, with CHFin cash & 3a plus CHFin Pillar 2 available, can afford …
Maximum purchase price · FINMA affordability test
CHF 1.02M
Bound by your income · CHF 815k mortgage on CHF 204k down
The three locks
Switzerland uses one formula. It will not move.
Every Swiss bank applies the same FINMA self-regulation. The 5% is the famous one (banks size your loan as if rates had tripled), but the down payment rule and the one-third rule bind most buyers in practice.
20%
Minimum down payment
At least 20% of the purchase price must be your own equity. Half of that, the first 10%, must be "hard equity" from outside your Pillar 2 pension fund.
0.20 × price
33%
Maximum cost-to-income
Annual housing costs (imputed interest, amortization, maintenance) cannot exceed one third of gross household income.
housing ≤ income ÷ 3
5%
Imputed interest rate
The test is run at 5%, not today's ~1.8%; a stress test for a future where rates revert to their long-run mean. It hurts your budget more than your wallet.
rate = 5.00% (fixed)
Have a place in mind?
Drop in a price and see where it would fail.
The ceiling above tells you what you can buy. This tells you what it would take to buy a specific place. Each test is independent: you need to clear all three.
CHF
CHF 100kCHF 5M
Not yet. 1 of 3 tests fail.
✕33% income ruleshort CHF 41k
You have CHF 180k/yrNeed CHF 221k/yr
✓20% down paymentpass
You have CHF 300kNeed CHF 250k
✓10% non-pension cashpass
You have CHF 200kNeed CHF 125k
The lever you can actually pull
Three ceilings. Whichever is lowest, that is your house.
With your cash and pension fixed, the price you can afford scales with income until either down-payment rule starts to bind. Above the kink in the cyan line, more salary will not buy you a bigger place; more savings will.
What you can affordIncome limit (5.6× gross)Total down (5× cash + pension)Hard equity (10× cash)
The bank's nightmare vs. your direct debit
You qualify for the stress test. You pay the real rate.
Banks calculate affordability at 5%. They lend at the actual rate, around 1.8% on a 5-year fixed. The gap is where the pain of qualifying turns into headroom in your monthly budget, for now.
Monthly headroom
2'427
The stress test charges you 1.9× what you will actually pay. That spread is what you have, in theory, to absorb a rate cycle, or invest, if you would rather.
Where this lands you
Median 4-room apartment, by city.
Your purchase-price ceiling (drawn in cyan) cuts across the price of a typical 4-room flat in Switzerland's nine largest urban markets. Cities above the line are out of reach without more income, more cash, or a different city.
Zug
CHF 2.15M
Zurich
CHF 1.78M
Geneva
CHF 1.69M
Lausanne
CHF 1.27M
Lucerne
CHF 1.18M
Lugano
CHF 950k
Basel
CHF 1.06M
Bern
CHF 980k
St. Gallen
CHF 780k
Within reachOut of reachYour ceiling · CHF 1.02M
Before you sign
This is probably the largest financial commitment of your life.
A home purchase is not just the price tag. There are significant costs on top of the purchase price that are not included in the affordability test above — and they add up fast.
9–12%
Upfront transaction costs
Notary fees, land registry, cantonal transfer tax (Handänderungssteuer), and bank arrangement fees. These are paid in cash on top of your down payment and are never financed.
1–2%
Ongoing annual costs
Building insurance, property tax (Liegenschaftssteuer), utilities, building reserve fund contributions, and the imputed rental value (Eigenmietwert) that is taxed as income.
?
Rent might win
In Swiss cities, renting and investing the difference often outperforms buying over 10–15 years. Ownership locks your capital, removes diversification, and costs more than most buyers expect.
None of this means you should not buy. It means you should go in with open eyes. The affordability test above tells you what you can do. Whether you should depends on how long you plan to stay, your alternative investments, and how much flexibility you need.
For scale
What else costs about CHF 1.02M?
A four-bedroom apartment in Bern · CHF 980k1.04×
A 12-metre sailboat moored on Lake Geneva, outfitted with 15 years of berth fees · CHF 750k1.36×
The career earnings of a median Swiss baker (40 working years, after tax) · CHF 2.60M0.39×
Tuition for one student at École hôtelière de Lausanne, six full BBA cycles · CHF 912k1.12×
CHF 4'000 a month invested at 6% real for 20 years (final portfolio value) · CHF 1.83M0.56×
A median four-room flat in Zurich · CHF 1.78M0.57×
A chalet in Verbier with a view of the Grand Combin · CHF 2.40M0.42×
A Porsche 911 GT3, replaced every three years for the next 40 years · CHF 3.08M0.33×
A waterfront villa on Lake Lugano with 800 m² of garden · CHF 3.50M0.29×
See the full income × down payment matrix
income ⬇ / cash ➡
CHF 30k
CHF 60k
CHF 100k
CHF 200k
30'000/yr
CHF 170k
income-bound
CHF 170k
income-bound
CHF 170k
income-bound
CHF 170k
income-bound
50'000/yr
CHF 283k
income-bound
CHF 283k
income-bound
CHF 283k
income-bound
CHF 283k
income-bound
80'000/yr
CHF 300k
equity-bound
CHF 453k
income-bound
CHF 453k
income-bound
CHF 453k
income-bound
120'000/yr
CHF 300k
equity-bound
CHF 600k
equity-bound
CHF 679k
income-bound
CHF 679k
income-bound
180'000/yr
CHF 300k
equity-bound
CHF 600k
equity-bound
CHF 1M
cash-bound
CHF 1.02M
income-bound
Holding your Pillar 2 fixed at CHF 100k for this table.
My Finance Tools · Portfolio trackerFree account
You have the 20%. Now do not lose it.
Track every account that feeds into your down payment: bank balances, Pillar 2 and 3a, brokerage, even crypto, in one place. We re-run this exact affordability test against your live balances every night and tell you the day you cross the threshold.
Swiss banks apply two limits at once. First, you must put down at least 20% of the purchase price, of which at least half (10%) must be liquid “hard equity” such as cash, Pillar 3a or securities. Second, your total annual housing costs (calculated at a theoretical 5% mortgage rate, plus 1% maintenance and amortization) must not exceed one-third of gross household income. The lower of the two ceilings is your real budget.
The 5% imputed rate is a stress test enforced by FINMA self-regulation. It is designed so that you can still service the mortgage if rates normalize to a long-run average. In practice your monthly payment is closer to 2%, but the bank (and your borrowing limit) is sized for 5%.
Yes, up to half of the 20% down payment. The other half (10% hard equity) must come from outside the second pillar. Withdrawing from Pillar 2 reduces your future retirement benefits and disability cover, and the amount is taxed at a separate, reduced rate at withdrawal.
Three lines: imputed interest at 5% on the full mortgage; amortization bringing the loan from 80% down to 66.7% LTV over 15 years; and maintenance & ancillary costs at roughly 1% of the property value per year. Property tax and ongoing utilities sit on top in real life but are not part of the affordability test itself.
The 33%/5% test pre-dates the low-rate era and was deliberately kept conservative after 2008 to keep household leverage low. The flip side is the world’s most stable mortgage market: Swiss mortgage default rates are below 0.1%, and that stability is priced into the lowest long-term rates in Europe.
The rules are national. Every Swiss bank uses the same FINMA self-regulation. What changes is the property price you can find for your budget. In low-cost cantons like Jura, Glarus or Solothurn the same income reaches roughly 50–70% further than in Zurich or Zug.
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