Mortgages: underpinning housing and the economy as a whole

High prices and short supply characterise the property market. But that is not putting many people off: the desire for home ownership remains strong. For the majority of people in Switzerland, owning their own home still represents security and quality of life, making it the preferred form of housing.

Whoever finds a suitable property to buy or starts a new construction project soon faces the next challenge – financing. This is where mortgages usually come into play – and in Switzerland, they are relatively inexpensive compared to other countries. This is due in part to competition among banks and in part to the specific characteristics of the Swiss market.

Why mortgages in Switzerland are relatively inexpensive

The Swiss franc is a safe haven for investors worldwide. That is why they invest assets in our national currency. Due to this high demand, interest rates in Switzerland are normally well below the level in Europe and the USA.

In Germany and France, you can expect to pay 3 to 3.5% interest on a 10-year fixed-rate mortgage. In the USA, 5% interest is the norm – and it is often even more. In Switzerland, future homeowners can usually obtain a 10-year fixed-rate mortgage for less than 2%.

What connects mortgages with tradespeople

With a market share of over 95%, banks are by far the most important mortgage lenders in Switzerland and thus play a central role in real estate financing. This puts them at the start of a long value chain that ranges from construction to trades and architecture to insurance. Mortgages are therefore not only a private financing instrument, but also one of the most important sources of financing for the Swiss real estate market.

The Swiss mortgage market has a volume of around CHF 1.2 trillion. Mortgages account for around 86% of all domestic bank loans. In the third quarter of 2025, new mortgage lending reached over CHF 22 billion – the second-largest quarterly inflow in the last five years. This shows that mortgages are a significant driver of the economy.

Stability thanks to responsibility and clear rules

Given the importance of mortgages for the economy, a stable mortgage market is extremely important. Banks therefore assess the affordability of each loan on a case-by-case basis, support their customers over many years and use forward-looking risk management to ensure that defaults remain rare.

Prudent lending is essential in this regard. As part of its self-regulation, the Swiss Bankers Association therefore issues guidelines with minimum requirements for mortgage financing – for example, on equity capital, amortisation, and affordability checks. These standards are recognised by the Swiss Financial Market Supervisory Authority FINMA as minimum regulatory standards. They help to limit risks and prevent overheating.