From tenant to homeowner – a new-found freedom that’s now more worthwhile than ever!

In Switzerland, where around two-thirds of households live in rented accommodation, many people dream of owning their own home. Various surveys show this. The desire for independence and freedom to design one’s own living space is widespread and strong. For Thomas Graf, an experienced estate agent in Bern, this comes as little surprise. In his view, there are many compelling reasons to go ahead and buy a detached house or a flat – particularly at this moment in time: “The current circumstances are ideal for tenants to realise their dream of home ownership now,” he says. A brief overview of the benefits and financing of property ownership:

Historically low borrowing costs

With last week’s further cut in the key interest rate – from 0.25% to 0% – the Swiss National Bank (SNB) is providing additional momentum for the property market. For prospective buyers, the latest round of interest rate cuts means that mortgages are likely to become even more affordable, whilst returns on savings are virtually non-existent. “Anyone buying or refinancing a home now will benefit from historically low borrowing costs over the entire term and can thus protect themselves against future interest rate rises,” says Thomas Graf. Buying a detached house or a flat makes housing costs predictable – in contrast to renting: due to the shortage of available rental properties, rents are continuing to rise unabated, with no end in sight.

There are many more advantages to owning your own home

As well as being more cost-effective than renting, home ownership offers further advantages: owners do not run the risk of having their tenancy agreement terminated – for whatever reason. This is part of the freedom and security associated with property ownership. This freedom is also evident when it comes to designing and carrying out any alterations to the property, both inside and out, such as in the garden or on the terrace. Smaller flats or older houses in particular often offer attractive opportunities to become a homeowner and thus leave your time as a tenant firmly behind you. “Home ownership offers many new freedoms; now is the ideal time to take the plunge,” emphasises property expert Thomas Graf.

Financing: What should you bear in mind?

• Plan with the right mortgage term: this varies depending on your personal and financial situation. You should always bear in mind any early repayment charges that may apply if you pay off a mortgage early. To spread the risks, it may be advisable in some circumstances to take out mortgages with different terms. As a general rule, you should only take out a Saron mortgage if you have financial flexibility. Despite the fixed-term commitment and the refinancing risk – should interest rates be high (again) at the end of the term – a fixed-rate mortgage can provide the planning security you require.
• Choosing the right mortgage amount: It is not uncommon for the mortgage amount to be set too high or too low. A look at real-world practice shows that, for younger property owners, the mortgage is often higher than is actually necessary. For older property owners, the mortgage is often rather low, with a significant amount of capital tied up in the property. In any case, the interest costs must be weighed up against the tax benefits.
• Amortising correctly: In principle, during a period of low interest rates, it makes sense to amortise the mortgage indirectly. As a borrower, you pay an amount contractually agreed with the bank into a 3a account, a securities account or a pension policy. You benefit from the interest earned in the third pillar whilst, at the same time, being able to deduct the mortgage from the imputed rental value for tax purposes. However, direct amortisation also offers advantages, as it reduces the mortgage debt – and thus the interest burden – on an annual basis.

“Buying your own home is particularly worthwhile at the moment,” Thomas Graf emphasises in conclusion. He adds: “Home ownership is always a sensible investment in your own assets.” At the same time, he points out that every property is unique and represents a significant investment. “That is why it is advisable to seek expert and professional guidance when buying a property,” says Thomas Graf.

Comprehensive property and financial expertise

The experienced property team at thomasgraf ag will be happy to advise you personally on the various aspects of home ownership – whether it be a flat or a detached house. This established property service provider also offers an exciting selection of attractive properties for sale in both categories. thomasgraf ag is a certified member of the Swiss Chamber of Estate Agents (SMK) and will also assist you with the sale of a property – providing a personalised service that meets the highest quality standards. Thanks to thomasgraf ag’s close cooperation with the asset manager and family office service provider TRIONINVEST, as well as the financial services provider hypolino ag, we offer you combined property-specific and financial expertise, many years of industry experience and a strong network.