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A mortgage is a long-term mortgage loan. If you want to take out a mortgage, you must understand its structure, ensure affordability, and choose a type of mortgage. We will explain everything you need to know.
The first mortgage corresponds to 66.67 % of the purchase price of your home. The second mortgage protects the rest of the external capital. This is normally 13.33%. It must be repaid in full within 15 years or at the latest by the time you reach age 65 (60 with AXA).
The general rule is: You finance 20% of the purchase price of your property from your own funds and the remaining 80% from borrowed capital. The higher the percentage you pay with your own funds, the lower your interest payments will be.
Moreover, the running costs of your house or apartment shouldn't amount to more than one-third of your gross annual income. This includes interest on the first and second mortgages, the ancillary costs, and the repayments for the second mortgage.
Regardless of whether you are buying an apartment, a house, or replacing an existing mortgage: With our two mortgage solutions, you are sure to find the right financing for your home. Do you prefer reliability or would you like to stay flexible? With AXA – as with a bank – you have the choice.
You prefer to know your fixed interest costs in advance and want to know exactly what interest will be due? Then the fixed-rate mortgage is the right solution for you. With this solution, you can set both the term and the interest rate, so you always pay the same mortgage interest for the agreed period. However, you are contractually obligated and cannot benefit from decreases in interest rates.
The minimum amount of a fixed-rate mortgage tranche is CHF 100,000.
Fixed, plannable interest costs are less important to you? You want to benefit from decreasing interest rates and are prepared to pay more in the event of rising rates? The SARON mortgage is based on the money market and is subject to daily fluctuations. Accordingly, this mortgage is especially suitable for homeowners who assume a decreasing or at least stable interest rate level.
With the SARON mortgage, you stay flexible and can switch completely or in part, free of charge, to a fixed-rate mortgage at the end of any quarter. The minimum mortgage amount for a SARON mortgage is CHF 100,000.
With a variable-rate mortgage, the interest rate changes according to the situation on the money markets and capital markets. You remain flexible because you don’t have to set a fixed interest rate or fixed term. If you expect interest rates to decrease and are not concerned about the risk of rising rates, then you should choose a variable-rate mortgage. This solution is also suitable for homeowners who, for example, would like to sell their home in the foreseeable future.
Our interest rates are based on the fluctuations on the Swiss money market and capital markets. Your interest costs will be fixed when you conclude the mortgage agreement. Your creditworthiness and the quality of coverage also play a role.
At AXA, you can conveniently make interest payments on a quarterly basis: On March 31, June 30, September 30, and December 31.
At AXA, the minimum amount for the entire mortgage on a property is CHF 400,000. Our interest and interest rates are aimed at ensuring first-class client creditworthiness and a low borrowing amount for the property. Depending on the type of property, its location, and the time of payout, these interest rates may vary.
The money-market mortgage is based on the SARON 3 months compounded rate, has a term of 3 years and can be converted into a fixed-rate mortgage at the end of each quarter. The minimum margin is 0.80% p.a.
Amortization is the repayment of your mortgage in installments. These can be made either directly or indirectly – depending on what better suits you and your financial situation.
Direct repayment is the annual repayment or amortization of your home. You pay off your mortgage. However, as your mortgage debt decreases, your tax liability increases again.
Indirect repayment is processed through your retirement provision. You don’t repay your mortgage, but rather invest regularly in a retirement provision policy, for example in a Pillar 3 solution with AXA. When the mortgage comes to an end, the mortgage debts are repaid with this capital. How you benefit: With this type of repayment, you benefit from tax advantages over the entire term.
Are you unsure whether you can afford your mortgage and cover the costs of your dream home in the long term? With our example, you can estimate your exact financial leeway and see whether you can afford the property.
To find out whether you can afford your own home in the long term, we calculate the so-called affordability of the property before granting any mortgage. In this way, we as the lender can ensure that you as the borrower can cover the ongoing financing costs – even in the long term. Much in the same way as a bank does. The total cost of the property shouldn't be more than one-third of your gross household income.
To find out what your home will actually cost, you add the amount of the mortgage, the effective interest rate, the amortization costs, as well as the monthly costs incurred for maintenance. The total shouldn't be more than one-third of your gross annual household income.
* Imputed interest rate: Lenders use this purely theoretical interest rate to gage whether you could still afford the mortgage if rates were to rise sharply.
** Repayment: The mortgage is repaid in equal quarterly installments. There is an obligation to repay the second mortgage: The second mortgage must be repaid within 15 years or by age 60 at the latest.
*** Ancillary costs: As a rule of thumb, 1% of the property value should be set aside every year for ancillary and maintenance costs.
**** Example interest rate: This depends on the lender's current rates and the term of the mortgage. We have used a rate of 3% in this example to keep things simple.
AXA uses the 20:80 rule: You should invest at least 20% of the purchase price of your own home yourself and borrow up to 80% in the form of borrowed capital (first and second mortgage). The higher the percentage you pay with your own funds, the lower your interest payments will be.
When you take out an AXA mortgage, you must pay at least 20% of the purchase price of the property from your own funds. None of this is allowed to come from an early withdrawal from Pillar 2 or other loans, and pledging Pillar 2 assets is also not permitted.
Mortgage repayment is normally split across two different mortgages:
The running costs of your home shouldn't amount to more than one-third of your gross annual income. These costs include interest on the first and second mortgages, ancillary costs, and repayments for the second mortgage.
AXA guarantees – as do many banks – mortgages for primary residences of homeowners. Single-family houses and condominiums with a broad market appeal and good resale potential
The minimum mortgage amount is CHF 400,000.
The minimum mortgage amount is CHF 800,000.
Your heirs must accept a sudden loss of earnings if you die. This loss of earnings puts the mortgage at risk. In a worst-case scenario, your home would have to be sold. With whole life insurance you can prevent this, as it allows your heirs to reduce the mortgage debt. The interest payments from the remaining income thereby remain affordable.
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