Abstract:
In this paper we will discuss about the mortgage market of Switzerland. Despite a good banking structure the Swiss mortgage market has grown up as expected. One of the main reasons behind that is the huge mortgage interest rates.
Switzerland mortgage is mainly collateral with the land on which the home is situated. Therefore, the owner is eligible for credit. The lender will only get the right to land if the borrower does not repay the mortgages.
In Switzerland, the mortgage business has some political aspect as well since all citizens, including savers and tenants, are associated with this business. Therefore, the mortgage rates are not same for the different categories. However, Switzerland claims the record for having highest number of savers in the world.
The banking structure in Switzerland is pretty good. Despite that the mortgage market have not grown up that much. The experts find several reasons for that. These are:
- Switzerland claims the record for highest mortgage indebtedness per capita across the globe.
- The mortgage interest rates in Switzerland have been constant for many years.
- Switzerland also holds the record for the highest withholding tax rate in the world.
However, currently the mortgage rates have decreased slightly. The government has taken several initiatives to accelerate the capital inflow. Moreover, the banks also reduce the rates. The mortgage rates have a bug impact on Swiss inflation rate. The rental rates have been increased by the government.