I was wondering if any of you have some experience with cross collateralized mortgage loans in Switzerland, i.e. using the exisiting equity in your family home to secure another home loan, in order to purchase an investment property for example.
I am assuming that from a mortgage provider’s perspective this would be considered different from a bridging loan (i.e. a loan allowing you to purchase the new property immediately without having to wait to sell the old one), as in this case the goal is to keep property #1 and purchase #2 without selling anything?
In my case, I own my home 100% as I inherited it without a mortgage on it. I am now considering moving to a bigger/newer home, but as I do not quite have enough savings to reach the minimum 20% for the deposit, I am thinking of contacting banks/brokers to see if the cross-collateralization option is possible.
If I understand correctly you want to have a mortgage on a house that you have no mortgage on and use the borrowed money as equity to buy a rental property ? Do you need a mortgage on the rental property you plan to buy ?
As long as you meet the affordability criteria there should not be an issue but beware that rental properties have a different affordability calculation compared to owner’s occupied primary residences. A constellation involving multiple properties with different usage is obviously a lot more complex to calculate than a plain vanilla case and you should talk to a client advisor about your project. Maybe you will have to meet a lot of people before finding the one able to advise you ^^.
Yes correct, as I do not plan to sell my original home (but on the other hand does not have enough for the deposit for the new property), it seems to be the ideal solution.
I definitely plan to discuss this with a mortgage broker/financial advisor, but it would have been good to hear if anyone has done similar things in Switzerland before.
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