Before a bank grants a mortgage, it checks two things: whether there is enough equity and whether you can afford the property in the long term. For the second question, Swiss banks apply a uniform rule of thumb, the affordability calculation (Tragbarkeitsrechnung). It is often referred to as the 33 per cent rule. If you know the rule, you can estimate which purchase price is realistic even before a viewing.
The formula at a glance
The bank adds up three blocks of costs and sets them against your gross annual income:
- Imputed interest: an imputed interest rate of 5 % (kalkulatorischer Zins) on the entire mortgage.
- Amortisation: The part of the mortgage above a loan-to-value ratio (Belehnung) of 65 %, known as the second mortgage, must be repaid within 15 years. The annual instalment is included in the calculation.
- Ancillary costs: 1 % of the purchase price per year for maintenance, heating, insurance and charges.
The sum of these costs may not exceed 33 % of the household’s gross annual income. If the figure is slightly higher, up to around 35 %, the financing is considered just about affordable. Some banks accept this if the overall circumstances are good, for example if there are additional assets or a secure income. Above that, financing is usually refused.
Why 5 % interest when the mortgage costs much less
Actual mortgage rates are significantly lower. At Voltavia Capital, reference rates for a five-year fixed-rate mortgage with a good credit rating and a loan-to-value ratio of up to 65 % start from 1.32 % (as at October 2026). Nevertheless, banks calculate with 5 %.
The reason is caution. A mortgage often runs for decades, and interest rates can rise sharply during that time. The imputed interest rate ensures that you can keep your home even if interest rates are significantly higher. The rule therefore protects not only the bank but also you from overstretching your budget.
Worked example
You buy a property for CHF 1’000’000 and contribute CHF 200’000 in equity, of which at least CHF 100’000 is hard equity. The mortgage is therefore CHF 800’000, which corresponds to a loan-to-value ratio of 80 %. Your gross annual household income is CHF 180’000.
First, the mortgage is split. The first mortgage goes up to 65 % of the purchase price, i.e. up to CHF 650’000. The remaining CHF 150’000 is the second mortgage. Spread over 15 years, this results in amortisation of CHF 10’000 per year.
| Item | Calculation | Amount per year |
|---|---|---|
| Imputed interest | 5 % of CHF 800’000 | CHF 40’000 |
| Amortisation of second mortgage | CHF 150’000 divided by 15 | CHF 10’000 |
| Ancillary costs | 1 % of CHF 1’000’000 | CHF 10’000 |
| Total | CHF 60’000 |
Now the total is divided by the income: CHF 60’000 divided by CHF 180’000 gives 33.3 %. The figure is just above the 33 % limit but below 35 %. The financing is therefore considered just about affordable.
To meet the 33 % exactly, a gross income of around CHF 181’818 would be needed. Alternatively, more equity could reduce the mortgage and thus the imputed costs.
For comparison: the actual interest costs with a fixed-rate mortgage at 1.32 % would be significantly lower, namely CHF 10’560 per year instead of the imputed CHF 40’000.
What counts as income
The decisive factor is the household’s regular gross income. This includes salary, a regular 13th-month salary and, for the self-employed, the average profit of recent years. Bonuses and variable pay components are often only partly taken into account or not at all. For couples, both incomes are added together, provided both people are borrowers.
Existing commitments such as leasing instalments, consumer loans or maintenance payments are, depending on the bank, deducted from income or added to costs. They noticeably worsen affordability.
If you are due to retire in the next few years, many banks also calculate affordability on the basis of your expected pension income. As this is usually lower than your salary, more amortisation may be required before retirement.
How to improve affordability
If the calculation does not work out, there are several levers:
- More equity: Every additional franc of equity reduces the mortgage, the imputed interest and often the amortisation as well.
- Lower purchase price: Reduces both the ancillary costs and the mortgage required.
- Pledging pension assets: Can reduce the amortisation requirement without you taking money out of your pension provision.
- Additional collateral or income: For example, another borrower with their own income.
Also bear in mind the equity rules: the loan-to-value ratio may not exceed 80 %, and at least 10 % of the purchase price must come from hard equity that does not come from the pension fund (second pillar).
With Voltavia Capital’s free affordability calculator, you can run your own figures using exactly this formula. If you would like to interpret the result together, we would be happy to advise you personally.