The interest you pay for a mortgage makes up the bulk of its cost. Even small differences in the interest rates applied by different lenders can equate additional costs in the thousands of Swiss francs. Because of that fact, you should definitely perform a mortgage rate comparison and get offers from several lenders before mortgaging a property.
But many homeowners do not know that there are additional costs on top of the mortgage interest charged. These go further than the general costs of taxes, notary fees and debt collection register statements. Many mortgage lenders charge supplementary mortgage fees.
Here you can find a clear summary of the possible supplementary fees which Swiss mortgage lenders may charge. Make sure to get informed about the exact fees charged by your prospective mortgage provider. In many cases, these fees are negotiable.
Before mortgage lenders grant mortgages, they perform credit checks to determine the creditworthiness of applicants. While some lenders do not charge fees for credit checks, other banks charge 200, 250 or even 500 francs. Other service providers charge fees based on the effort required to perform credit checks (120 francs per hour, for example). Some banks waive credit check fees if mortgages are approved and applicants sign up for them. Applicants who do not end up signing up for a mortgage must pay the credit check fees.
Mortgage issuing fee
Many Swiss banks charge additional fees for the issuing of mortgages which have been approved. Some charge just 100 francs while others charge as much as 1000 francs. Some banks charge different issuing fees for different kinds of mortgages or properties.
Increasing a mortgage
Typically, increasing the size of your mortgage is not free of charge. Many banks charge 200, 250 or 500 francs in fees for mortgage increases. The fee may also vary based on the loan size.
Changing mortgage models
Migrating to a different kind of mortgage may also cost money. Fees may apply when, for example, you want to convert a fixed rate mortgage to an adjustable rate mortgage. Depending on the bank, converting a mortgage could cost 150, 200 or 250 francs, for example.
Extending a mortgage
Extending the term of a mortgage may also come at a cost for mortgagors. That can be disconcerting for many borrowers. Instead of being rewarded for their loyalty, lenders charge them additional fees. Some banks charge 75, 150, 200, 250 or even 500 francs for mortgage extensions.
Other changes to contracts
Other changes to mortgage agreements may also generate fees. For example, lenders may charge fees to transfer a mortgage agreement to a new mortgagor. Fees may also apply when changes are made to a mortgage’s amortization schedule or collateral. Some banks charge fees of up to 1200 francs for certain kinds of changes to mortgage agreements.
Changing mortgage providers
Refinancing your mortgage with a better offer from a competing lender can make financial sense in some cases. But be aware that you may be charged hefty fees by your current lender when you migrate to a different lender. These can easily come to several hundred francs, with some lenders charging as much as 600 francs.
Billing and late payment charges
Some lenders charge additional fees when mortgage payments are paid using deposit slips – rather than being debited directly from bank accounts. These billing fees may be as high as 50 francs per invoice. Lenders typically charge penalty fees when bills are not paid on time. Penalties can be as high as 200 francs, depending on the lender and on the number of payment reminders sent. Interest may also be charged on the amounts owed.
Early termination penalties
Terminating mortgages ahead of schedule is complicated and expensive. You can find detailed information in the guide to early mortgage terminations. Some banks charge high administrative fees in addition to interest adjustments for the remaining mortgage term.