What is a mortgage note?

Purchase

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

What is the purpose of a mortgage note?

 

To purchase a property, you will most likely contact a financial institution to obtain a mortgage to finance your property. The mortgage note guarantees the financial institution that the funds loaned will be repaid and that the interest due will also be paid. If this is not the case, the note authorizes the financial institution to seize and sell the property if the repayment is not honoured.

 

How does a mortgage note work?

 

A mortgage note can exist in two forms: paper or virtual.

It is also called "paper value" and is not necessarily named in its paper form. However, it is important to ensure that it is kept in a safe place.

The second form appeared in 2012 and allows for avoiding the note's loss or destruction. It is however necessarily nominative. In all cases, the note must be registered in the land register and must be established by a notary.

 

What are the costs involved?

 

The creation of a mortgage note generates several types of costs, including stamp duty, land register fees, notary fees and VAT. Generally speaking, it is said that the cost of creating a mortgage note amounts to approximately 2% of the amount of the mortgage loan. To eliminate and reduce these costs, a cedula can either be transferred free of charge or resold by the seller of the property to the future buyer.

By Charline Demange, January 5, 2023

Can't find the answer you're looking for?

Do not hesitate to contact us!

Noa Bechtiger

Noa speaks Deutsch and English, chat with her online:

Do you have a broader question about real-estate?

We have asked our brokers to share their expertise with you; visit our blog where you will find everything you are looking for!

Check out our latest blog posts
How much is your property worth?

Appraise your property online in 2 minutes.
Free of charge, no strings attached.

Appraise my property for free
What is your purchasing capacity?

Wondering how much you can afford to spend on your dream property? Give a try to our easy calculator.

Calculate my purchasing capacity

Sell at the best price with the expertise of your local agent!

Photo of the real estate agent: Barbara Bordogna
Photo of the real estate agent: Mikail Seckin
Photo of the real estate agent: Jacqueline Marti
Photo of the real estate agent: Robert Mayr
Photo of the real estate agent: Nicolas Pivin
Photo of the real estate agent: Lukas Speck
Photo of the real estate agent: Gianluca Sergi
Photo of the real estate agent: David Damiano
Photo of the real estate agent: Julio Kimmelmann
Photo of the real estate agent: Pierre-Frédéric Von Kaenel
Photo of the real estate agent: Frédéric Frachon

Benefit from a 15-minute consultation with one of our experts.

Free and without obligation.
Reservation online.

Benefit from a 15-minute consultation with one of our experts.

Free and without obligation.
Reservation online.