familien hypothek schweiz
Loans & Mortgages

Family Mortgages Compared

A number of Swiss banks and insurance companies offer what are popularly know as «family mortgages». In this moneyland.ch guide we’ll let you know what you should take into consideration before applying for a family mortgage.

Anyone who dreams of owning their own home in Switzerland, particularly in a desirable location, will likely be confronted with the issue of «Swiss style» property prices. But although home prices may be high, mortgage interest rates are relatively low at the moment. This makes taking out a mortgage to buy your home an attractive option.

In the case of families with young kids, owning a home not only fills an emotional need, it’s also a key investment in the future. A number of Swiss banks have responded to the dream of owning your own family home by adding family mortgage offers to their portfolio of mortgage products.

The advantage of this type of mortgage for families is that it comes with reduced mortgage rates. This reduction can range from 0.2% to 0.5%, depending on the lender. Raiffeisen Banks, for example, offer rate reductions of up to 0.5% per child, albeit only for a limited period of time and a limited loan amount.

Things to consider before you apply:

  • This may seem obvious, but to be eligible for a family mortgage, you will usually need to be a family with at least one child under the age of 18 (or 20 in some cases). Most banks also expect that the child will actually be living with you. But there are a few exceptions. Mortgages provider family-net, for example, even offers its discounted rates to single adults.
  • You should note that rate reductions for families usually only apply for a certain amount of time, and to limited loan amounts. Before applying for this type of mortgage, make sure to carefully analyze your long term financial situation. In many cases a family mortgage won’t be the most affordable option, and depending on the rates you get, a regular mortgage might provide better value. The best thing you can do is to compare mortgages of all types and get as many offers as possible, before you settle on the mortgage of your choice.
  • The rate reductions you get with some banks are more like a signing bonus, and may apply only for the first three years, for example. After this family discount period, the regular mortgage conditions will apply. Family mortgage critics consider the «family» approach to be little more than a marketing gimmick.
  • In most cases, family mortgage rate reductions can’t be combined with other mortgage discounts, such as energy efficient mortgage reductions.
  • Low rate offers usually only apply to the original mortgages. But some lenders will give you a family mortgage rate reduction even when you refinance.
  • Discounted rates often apply only to a limited portion of your mortgage. For example, you may only receive the lower rates for the first 200,000 francs of your mortgage. But some banks, including Valiant Bank, offer a much higher cap of 600,000 francs.
  • There is usually a floor on the mortgage amount you can borrow, while still being eligible for family mortgage rates. Typically, you will be required to get a mortgage with a minimum loan size of 100,000 to 200,000 francs.
  • Mortgages with family discounts are normally only available as fixed rate mortgages (FRMs). That said, a few banks do offer variable rate family mortgages, and an even smaller amount offer mortgages with LIBOR-indexed rates. Additionally, most banks only offer a handful of loan tenure options for family mortgage FRMs. There are even banks which provide only a single variety of family mortgage, typically a 5-year FRM.
  • The various cantonal banks («Kantonalbanken» in German, «Banques Cantonales» in French-speaking Switzerland) and other regional banks often limit family mortgages to properties in the canton or region in which the bank operates.
  • In many cases, banks will only consider a property designated as your primary residence to be eligible for a family mortgage. That means your family will actually have to live in the mortgaged property. Here again, there are exceptions, and some banks will finance properties even if they aren’t your primary residence.

More information:
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Expert Benjamin Manz
Benjamin Manz is CEO of moneyland.ch and an independent expert on banking and finance.
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