I have good quotes for mortgages, but what about mortgages for residential property that is rented out? The providers I used in the past don’t offer mortgages for non owner-occupied property.
Any good providers you can recommend? I’m looking to lock in low long term fixed rates.
Do people here have experience on how banks in CH treat investment properties and the rent they yield (all in CH)? Assume I have zero income and an investment property with mortgage X and gross rental income Y: would they let me refinance the mortgage if Y >= X * 0.06? I.e., if rent can cover 5% interests + 1% maintenance costs?
Surely you found something? When I shopped around in your situation (and the place had to be renovated before it could be rented out) all banks I contacted were happy to do business with me, albeit with a large variance in interest rates offered, so I am surprised you had the opposite experience…
Yes, I took a 10 year fix at 1.5%.
Just imagine as if the rental income was your salary.
Yes, this is a must. Your rental income must exceed the 6% in theoretical interest costs and maintenance/upkeep + the amortisation (if needed). On top, for pure investment properties the banks usually ask for more equity, between 25-40% depending on bank and property.
that would mean the rental income bust be 3 times 6% of the mortgage, but maybe the example is too extreme with 0 income to start with…
They apply an haircut on the rental income, typically 20% haircut.
Nope it depends.
Some bank apply just the 5% and no maintenance costs on their calculation.
At least if your are not first rank with 35% equities on the property
If there is a renter in place they take 100% of income if this cover the 5% of the debt then it’s fine they even don’t care about your salary.
That means you own the property for a long time or/and made a good deal😁
I should have ~50% of the market value by the time the mortgage needs to be renewed (if things continue as they are and there is no crash) and currently the gross rent is just above 5% of the loan.