You have found your dream home – but can you afford it over the long term? In order to clarify this at an early stage, an affordability assessment can be carried out. Everything you need to know about this is explained here.
The role of affordability in purchasing residential property
An affordability assessment indicates whether you can also afford your desired property over the long term. To calculate affordability in each individual case, the upkeep costs of the property are compared to your income.
As a rule of thumb: a property is considered affordable if the monthly costs do not exceed a third of your gross incomye. Mortgage providers therefore see your income as an important criterion in determining
whether or not you can be granted the mortgage you want.
How affordability is calculated
The monthly costs incurred for the affordability calculation comprise the imputed interest, the amortisation costs and the ancillary costs for your property.
- Imputed interest rate: Mortgage institutions do not use the actual interest rate for the affordability calculation. Instead, a so-called "imputed rate of interest" is applied. This is higher than the current values, so the costs for the mortgage are noticeably higher when calculating affordability than in the actual mortgage offer. There is a good reason for this: in this way, the institutions want to ensure that the financing remains affordable for you even when interest rates rise.
- Amortisation: The costs for repayment (amortisation) of the second mortgage are also factored into affordability.
- Ancillary costs: Ancillary costs comprise the maintenance costs of a property. These include insurance premiums as well as heating and electricity costs.
The easiest way to find out whether you can afford your own home is with an affordability check. With this calculator, you can find out in just a few clicks, based on your personal criteria, whether you can also finance your dream home over the long term.
How to ensure the affordability of your residential property
In a comprehensive consultation, we consider not only the affordability calculation but also all other aspects related to your pension provision, your finances and your financial security. In this way, we would like to enable you to find the best financing for you.
We provide you with professional support from the start to the end of your financing and support you on the path to a self-determined life in your own four walls. Our advice offers many advantages for you:
- We take a comprehensive look at your personal situation and tailor the financing concept for you.
- On the SwissFEX mortgage platform, we show you a wide range of offers from different providers. In this way, you can transparently compare several suitable offers in real time together with your advisor.
- We will work out a tax-optimised amortisation model for you.
- We ensure that you can continue to finance your home in the event of a misfortune with financial consequences, and thus continue to lead a self-determined life.
- In contrast to regulatory guidelines which calculate the imputed rate of interest, we show you the actual monthly costs for your home
Mortgages offering best rates
Read here how to get the mortgage with the best interest rate for you.