Online Mortgages in Switzerland Explained

Mortgages are one of the more complex banking products. Mortgage applicants must provide the lender with many personal details, including sensitive information about their income and wealth. These factors can play a role in determining how much interest the applicant has to pay for their mortgage.

Choosing the right mortgage model can also be difficult. Should you get a SARON mortgage, an adjustable-rate mortgage, or a fixed-rate mortgage? If you get a fixed-rate mortgage, which mortgage term should you use?

There may be other questions too. Do you need a second mortgage, and how is it different from the first mortgage? Are there discounts for specific kinds of properties or for families? What are the penalties for terminating the mortgage before the mortgage term ends?

Online mortgages without consultation

It is not surprising that borrowers typically only settle on a mortgage after a long consultation with a bank employee or an independent mortgage advisor. The more personalized consultation is required for a banking service, the less likely people are to get it online.

That is generally the case with mortgages. While Swiss do often use the Internet to get informed about home financing options, the majority of mortgages are still concluded in person together with a consultant.

Growing market share

According to a study by the Lucerne University of Applied Sciences and Arts, online mortgages in Switzerland had a market share of just 4 percent at the end of 2021. But that is still a substantial gain since 2014. The volume of mortgages which are applied for online has grown faster than the total mortgage volume across private Swiss households.

Advantages of online mortgages

• Costs: Because banks do not have to offer costly consultations, they can offer online mortgages which are more affordable than their standard mortgages. A moneyland.ch evaluation in March, 2023, shows that Swiss fixed-rate mortgages offered online are between 10 and 15 percent cheaper, on average, than conventional mortgages. The price differences were even larger (up to 30 percent) during the period leading up to 2022, when key interest rates were negative.
• Online mortgage applications are simple and can be completed quickly, as long as the borrower has a good understanding of mortgages.

Disadvantages of online mortgages

• Consultation for online mortgages is normally limited to technical questions. If you need a thorough consultation, you will normally still have to visit a bank branch office and get a conventional mortgage.
• Online mortgages are often limited to specific kinds of property (normally homes which are used a primary residences).
• Other limitations include lower maximum mortgage sizes, and stricter collateral requirements. Some online mortgages have maximum loan-to-value ratios of between 65 and 75 percent.

Swiss online mortgages compared

Swiss banks often launch their online mortgage services under a new brand. In this way, Swiss banks try to avoid cannibalizing their conventional mortgage business. But there are also service providers like Baloise and Migros Bank which offer online mortgages under their main brand.

You can find a comparison of current interest rates for online mortgages in the mortgage comparison on moneyland.ch.

Major Swiss online mortgage providers include:

Avantage Service (Banque Cantonale de Genève)

Avantage Service is an online subsidiary of Geneva’s cantonal bank which offers fixed-rate mortgages with terms of 2 to 15 years. It also offers SARON and adjustable-rate mortgages.

Baloise

In addition to conventional fixed-rate mortgages, Baloise also offers online mortgages with terms between 2 and 10 years.

Fribenk (Banque Cantonale de Fribourg)

The online Fribenk platform from the cantonal bank of Fribourg offers fixed-rate mortgages with terms of 2 to 20 years, as well as adjustable-rate mortgages. Only primary (first) mortgages are available.

Hypomat (Glarner Kantonalbank)

Hypomat became one of the first online mortgage providers when it was launched by the Glarner Kantonalbank in 2012. It offers fixed-rate mortgages with terms of 2 to 20 years. It also offers a number of SARON mortgages and adjustable-rate mortgages.

The published interest rates, which are updated daily, are the effective interest rates which you get, and not just guide rates. In addition to houses used as primary residences, first mortgages for holiday homes and investment properties are also offered.

Migros Bank

In addition to classical mortgages, Migros Bank also offers online mortgages with discounted interest rates. The offers which are available online are fixed-rate mortgages with terms between 2 and 10 years.

Myhypo (Thurgauer Kantonalbank)

Myhypo is the online mortgage platform from the Thurgauer Kantonalbank. Myhypo lets you apply for fixed-rate mortgages with terms ranging from 2 to 10 years. SARON mortgages with terms between 2 and 5 years are also offered, as are adjustable-rate mortgages. Financing is limited to properties in German-speaking Switzerland.

Swissquote

Launched in 2011, the online mortgage from Swissquote was the first Swiss online mortgage provider. At the time, Swissquote collaborated with the Basellandschaftlichen Kantonalbank to provide home financing. It now works with the Luzerner Kantonalbank.

Swissquote offers fixed-rate mortgages with terms between 2 and 10 years, as well as SARON and adjustable-rate mortgages.

Online mortgage refinancing

The online mortgage providers listed above offer both first-time mortgages and refinancing. But there are also banks that offer mortgages which can only be used for refinancing. Banks which offer mortgage refinancing through online channels include the cantonal banks of Lucerne, Obwalden, and St. Gallen.

Online mortgage brokers

In addition to online mortgages offered by lenders themselves, there are now also numerous online mortgage brokers. Typically, these brokers do not have their own mortgage offers, but simply pass on customers to the banks that they partner with. Some mortgage brokers offer personal consultation at their offices. Well-known mortgage brokers include Moneypark, Hypoplus from Comparis, Financescout24, Valuu from Postfinance, Key4 from UBS, and the Hypotheke platform from Vermögenspartner.

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