Funding architecture
Financial institutions, banks, insurance companies, will establish a viability calculation in order to estimate your financing capacity, here is how a mortgage financing calculation is structured:
Le 1er rang: it represents 2/3 of the price of the property, it must not necessarily be amortized.
Le 2ème rang: amount corresponding to the price of the property – equity – 1st rank
Direct / indirect amortization: this is the reimbursement of the second rank, which must be made up to retirement age, at most over 15 years (ASB 2014 directives), this can be amortized directly, i.e. by reimbursing the debt to the financial organization directly or indirectly, ie through a 3a life insurance policy which will be pledged by the organization.
Maintenance costs: 1% of the price of the property, these various costs correspond in particular to the maintenance of the house, charges, insurance, etc …
Equity: must be at least 20% of the price of the property (10% of which must not come from the 2nd pillar pension fund, in other words you will need to bring 10% of your own funds in cash).
In order to validate your project, the amount of the annual expenses must not exceed one third of the annual income or 33% (rate of effort, may be higher depending on the good repute of the client).
Do not hesitate to do a viability study on our site via the following link: https://www.assetial.ch/calculateur-hypotheque/
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The criteria for calculating viability may vary depending on the financial institution, contact us for more information.
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Example of classic financing
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Couple, aged 35 and 36
Couple’s gross annual income: 200’000.-CHF
Price of the property: 1’200’000.-CHF
Own funds: 300’000.-CHF
How viable will their project be?
1er rang: 1’200’000 X 66,67% = 800’040
1st rank interest: 800’040 X 5% = 40’002
2ème rang: 1’200’000 – 800’040 – 300’000 = 99’960
2nd row interest: 99’960 X 5% = 4’998
Amortization : 99’960/15ans = 6’664
Maintenance fees : 1’200’000 X 1% = 12’000
Total theoretical annual charges: 40’002 + 4’998 + 6’664 + 12’000 = 63’664
Effort rate: 63’664 / 200’000 *100 = 31,83% (maximum 33%)
Annual expenses represent less than a third of their income,this couple is therefore fundable.
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