Property financing: everything you need to know to bring your project to life

Property financing: a structuring step

Acquiring a property is a major financial project, typically considered within a long‑term perspective.

Financing is not limited to securing a loan: it involves finding the right balance between personal funds, borrowing capacity and overall financial strategy.

When properly structured, financing helps ensure the success of your project while preserving long‑term financial stability.

Assessing your budget

The first step is to clearly define your financial capacity.

This includes analysing:

your income,
your current expenses,
your existing financial commitments,
and all costs related to the property.

These costs include:

the purchase price,
additional expenses (notary fees, taxes, maintenance).

This assessment helps determine the amount you can realistically allocate to your project.

Equity: a key requirement

In Switzerland, property financing is based on a fundamental principle: part of the property must be financed with your own equity.

In most cases:

you must provide at least 20% of the property value,
part of which must come from your personal financial resources.

Equity can come from different sources, such as:

personal savings,
pension assets,
third‑pillar assets,
or other forms of capital.

This requirement ensures a solid financial foundation for your project.

The role of mortgage financing

The remaining portion is generally financed through a mortgage loan.

This type of financing:

is granted by a bank or financial institution,
is secured by the property itself.

In most cases, mortgage financing can cover up to 80% of the property value.

Assessing your borrowing capacity

Borrowing capacity is a key factor in accessing property ownership.

Financial institutions will assess:

the stability and level of your income,
your level of indebtedness,
the sustainability of your financial commitments.

In Switzerland, a common rule applies: housing costs should not exceed roughly one‑third of gross income.

Understanding the financing structure

Property financing is not limited to a simple loan.

It generally consists of:

your equity,
a mortgage (often structured in several tranches),
ongoing costs linked to the property (interest, amortisation, maintenance).

This structure helps distribute risk and adapt the financing to your specific situation.

What to anticipate

Beyond the initial financing, several aspects should be considered:

potential changes in interest rates,
maintenance and renovation costs,
tax implications,
changes in your personal situation.

A long‑term perspective is essential to ensure the sustainability of your project.

Property financing within a broader strategy

A property project should be seen within a broader framework that includes:

wealth management,
pension planning,
taxation,
life objectives (primary residence, investment, succession planning).

It is not only about acquiring a property, but about structuring a project aligned with your overall financial situation.

Property financing is based on a set of key parameters that must be carefully assessed. By understanding its mechanisms and constraints, you can structure a project that aligns with your financial capacity and long‑term objectives.

Want to know more? Contact a Piguet Galland advisor