I could really use some outside perspectives because I feel pretty stuck right now.
My situation:
28 years old, married (together for 10 years), no kids yet
I have ~130k CHF in VT, ~35–40k in my 2nd pillar, and ~22k in my 3rd pillar and some “notgroschen” in my savings account.
My wife has ~50k CHF (all in VT)
Combined income: ~200k CHF (me 150k, her 50k-60k still in university)
Originally the plan was simple: save, invest, travel smart.
Now, we’re dreaming about owning a house and maybe starting a family soon.
In our area (Zofingen / Rothrist), houses cost easily 1.2M CHF or more. We could probably scrape together 20% downpayment soon but we would still not qualify for a mortgage because of the income rules (calculated it a while ago and got rejected).It’s frustrating despite a decent income, buying seems almost impossible without inheritance. And this is not even Zürich or or in the near lol.
I have “Vorzugskonditionen” for mortgages (-0.5% discount). If rates are about to drop, it feels like the time to move. But i find it extremely difficult to get onto something because we have not enough income for the mortgage even though we could provide 20% anytime soon.
How did you guys manage to buy your first home? Inheritance? Or lend money from parents? or just save 33% up? What’s your personal experience and how would you react in my situation. We also considered maybe buying something abroad where we like to go on holidays but seriously, switzerland is our home and it feels wrong to first buy something abroad instead of here. Also taking in consideration the inceasing prices that make me feel like if i wait longer it will be even more difficult.
Saved up and bought the cheapest 1 bed apartment I could afford. We were single earner no kids then so just got on the property ladder. By buying small and having an flexible mortgage, we quickly paid off the mortgage.
Then we split up and so I bought out the other half. I moved and rented and turned the flat into a rental. I made some timely investments in gold which I sold and then using that as a deposit and rental income stream, bought a house split into 2 flats that was quite run down for 700k. I rented out the smaller flat which was enough to cover the mortgage and then started using the income streams to pay into stock portfolios.
My advice is don’t over-stretch yourself financially. Find something that is cheap or a bargain. If you can’t find it, just rent and keep looking.
I prefer to make sure that the property makes sense as a standalone rental investment as you never know when situations change (divorce etc.). Otherwise, you are paying for consumption and a 1.2m CHF consumption is not something many can afford and will forever be a financial millstone around your neck. I’ve seen so many times that people commit financial suicide by splurging on their home.
I’ve bought an older house in a more remote area, I’m benefiting from energy subsidies for the renovation.
If you’re willing to drop everything into your house, which I don’t recommend, it sounds like you’re almost there. 200 kCHF of income should “afford” you roughly 888 kCHF of mortgage under the standard rules. Some banks might be willing to stretch that number somewhat depending on how attractive you can make yourselves.
I’m seconding @PhilMongoose, though, overstretching yourselves to buy a house can bring tensions, both personal and inside the relationship.
Edit: as a rule of thumb, I’m using for income affordability criteria: Income /3 /6% *80%
One 3rd of your income should be able to cover the costs calculated by the bank:
5% interests on a mortgage for 80% of the value of the home = 5%*0.8 = 4% of the total value of the home
15% of the total value (80%-65%) to amortize in 15 years = 1% of the total value per year.
the usual number thrown around for maintenance fees is 1% of the total value per year.
4%+1%+1% = 6% of the total value of the house/appartment. 80% of which can be financed by a mortgage.
We bought a small house in a small village in 2016. We saved a lot in the three years before we bought the house while living in an apartment without a lift or balcony. In the end we only needed a bit more than 100000 CHF as a down-payment and got an almost new house.
We also waited to have children until we have bought the house so we had no childcare costs while saving.
Saved for 10y, though not specifically for it, initially I wasn’t interested in buying.
Then at some point we realised we had enough savings/income (which had been gradually creeping up over the years).
It happened in our early 30s, so give it a few more years and you will easily reach it. Once your wife starts working, income should have a big step up as well (I assume she’s doing a PhD based on income/age).
One thing I noticed with a lot of Swiss people is that they start to work quite late (second half of 20s). That reduces the window before you really can’t delay having kids anymore (with the usual income drop it entails), and gives you less time to accumulate wealth/income.
I can only second the logic used by PhilMongoose. If buying makes financial sense, start with a small property (e.g. a bachelor’s flat) that you can easily afford and that can easily be rented out. Then work your way up from there. If you do end up starting a family, you can simply rent out the place and rent something with one more room (and then 2 or 3 more if your family grows).
I would never recommend buying something solely based on a family, as a family is a transitory affair (e.g. kids grow up). If you buy based on a relationship, the purchase should be organized as a business relationship, with co-ownership shares, etc.
Low interest rate environment, kept looking for about 2 years until something I could afford and that ticked my boxes came along.
Saying that, it’s a small place and I don’t think financially a bigger place in CH makes sense to buy. The cost of capital just becomes too much and unless something drastically changes, I will rent if I ever need a bigger place, rather than buy.
And on this point, don’t underestimate the amount of time you need to find a good place. It took me 3 years of looking to find my first place (rather lucky as it was a small town and the owner died leaving it to 4 kids who wanted to sell ASAP) and it took 11 years to find my 2nd place. (10 years for a place I bid on but then lost).
Unfortunate for you, it’s been easier 20 years ago to buy a home. Now it’ about priorities or with help from family. If you want a home, then better now and with 2 x 100% paying jobs. IMHO, wife needs to step up and earn more. Later, with children, you may want to reduce workload, at which time the bank will now longer have issues with it.
Yes that our target. Unfortunately she can not step up atm because of her studies. After that of course we hope and it‘s planned to get a better paying job.
But like you said. It got difficult today of course.Unfortunately we can not get any help from family and tbh i also wouldn‘t want to get help. Inheritance would be something else but i don‘t want to lend money.
Let‘s see… When you start from zero in switzerland it seems almost impossible to get a house in appropriate time if its not completly remote location.
The home buyers I know in ZH, including me, are well in their 30’s, finished university and worked full-time for several years before having kids and only then bought property. Basically, your original plan plus some time.
But I guess even in that group some got an early-inheritance of their parents and lacked either income or capital, but they don’t talk about it
Define appropriate time and define completely remote.
I would say a good appropriate time could be when both partners are working (so after the studies). It seems you are getting there and it seems you won’t have big problems to qualify for assets in your target price range and area once you are there.
Saved very hard for 4 years, we lived in a small old apartment, no vacations, no car, no spendings. It was tough but my wife and I had a goal, we absolutely wanted to have our own place. It was possible because we had no kids yet.
We bought the cheapest apartment on the most expensive street. From my experience and thinking, this is a winning strategy, the real estate with certain characteristics, lake view, big land, adjacent to amenities like public transport in major urban areas have the most price stability even in down markets. Simply, there are too many rich people that won’t pass up on rare opportunities.
This sounds exactly like our house, hopefully you are right!
In our case it was just putting money aside, for about 10 years since we started to work in Switzerland (after moving from Poland). Or rather it was me working since 2011 and my wife since 2013. It allowed us to buy a house in 2021 and then renovate it almost fully (eg. we haven’t changed the roof and surroundings) which has finished in 2023 (but we were living inside already since Oct 2022 ). And if you own the house… I guess renovations never finish
We were not saving like crazy, we were living normal lives, with quite a bit of travelling, with our only child (born in 2008) until 2016, which is when our 2nd child automagically appeared. So it took us quite a long time, but without much pain to be honest.
“Unfortunately” I was not investing the money we were saving, us I knew that we will need it in a few years, which was certainly too short period to go with stocks. What a mistake…but only in hindsight!
You are doing solid. 28 years old (both?) with around 200k CHF annual income. Wow, this is much better than my wife and I when we were 28 years old.
With 200k CHF family annual income, I think you are definitely qualify for 1M mortgage. Then plus 200 - 300k savings in the near future for the downpayment, I see you being able to buy the house in the very near future.
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