What is a mortgage?

Purchase
Taxation

A mortgage is a loan that a financial institution gives to a buyer to purchase a property.

Why use a mortgage?

 

Many buyers do not have sufficient funds to fully finance the purchase of a property. In this context, many of them take a mortgage out. Generally speaking, the mortgage represents 80% of the value of the property. The remaining difference must be provided by the buyer in the form of equity.

 

What does a mortgage consist of?

 

As a general rule, when a mortgage is taken out, it is often split into two parts:

  • The first rank represents 2/3 of the amount of the property
  • The second rank covers the remaining amount of the loan that must be reimbursed within 15 years or before retirement age.

In addition, by taking out a mortgage, you will have to pay mortgage interest.

By Charline Demange, July 28, 2022

Additional definitions

  • Purchase
    Mortgage note

    According to the Swiss Code of Obligations, a mortgage note is "a personal claim secured by a pledge of real estate".

    Read more
  • Purchase
    Taxation
    Equity

    Equity is the personal contribution you have to finance the purchase of a property.

    Read more
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