Home loans in Switzerland is very affordable and provide the most customer friendly interest rates in the world. This sector is not under the lime-light because the focus remains on the international banking in the country. But, the home loan or the mortgage sector of Switzerland is one of the major components of the excellent banking services of the country. The market for home loans in Switzerland is very wide and steady.
The major features of the sector are the highest per capita mortgage indebtedness, the best interest rates in the world and the highest tax deductions in the world.
In Switzerland, the land serves as the security or collateral for the loan. The owner of the land can apply for an amount as a home loan, which is not more than the value of the land itself. The home loans in Switzerland are divided in the following three types:
Direct mortgage loan
Fixed loan with indirect mortgage
Building credit with collateral
The direct mortgage loan and the fixed loan with indirect mortgage loans are more or less same except the security factor. In the direct mortgage home loans in Switzerland, the loan provider has the right to sell the collateral if the loan is not paid back according to the conditions. In the indirect mortgage home loans, if the borrower becomes a defaulter, he or she carries the responsibility to sell the asset himself or herself and pay back the money to the loan-lenders. On the other hand, the building credit loans in Switzerland, transforms into direct or indirect home loans after the completion of the construction.
There are several banks in the country to serve the purpose. The major home loan providers of the country are the large banks. The cantonal (state) banks also plays a major role in the home loan industry on Switzerland. Apart from these giant players, there are the cooperative, regional and savings banks also that provide home loans.
