Calculating rent add-ons
If you already rent an apartment, this will not be news to you, but in both France and Switzerland you generally have to make a deposit on a flat. In Switzerland the three months’ rent guarantee is held in a separate bank account where it earns minimal interest. You can’t touch it, but neither can the landlord. An interesting alternative to this is SwissCaution, where you buy rent deposit insurance. In France the guarantee is generally two months.
Swiss cantons have standard lease forms that cover the deposit and ensure that you get it back quickly when you leave. Horror stories abound about what the landlord expects in terms of cleaning before you leave, but many of them originate in the German-speaking parts of Switzerland, where cleaning skills take on a life of their own.
France is particularly big on the idea of “key money,” but the concept is also widespread in Switzerland: if you rent property and improve it, you should have your landlord’s agreement in advance that you can charge key money to the next people who rent. This will cover some but not all of your improvements.
Subletting is allowed in Switzerland as long as you follow basic rules. Read your lease carefully before you consider subletting your apartment; you must have the owner’s agreement in writing. If you are thinking of renting a sublet apartment, ask for a copy of the lease to make sure it is legal.
Housing: buying property
Banks are the primary source of mortgages in Switzerland and while there is some competition, the lending terms do not vary enormously from one bank to another. Comparis, a consumer group, offers comparison tables and a good basic explanation, in French, of what is on offer.
Swiss mortgages tend to be for very long periods, with the final repayment date often not even mentioned, which is a key difference between this and most Anglo-Saxon systems. Interest payments are tax deductible, a system that encourages people to look for the best interest rate in terms of their overall tax situation and to keep their mortgages until they retire.
The deposit required changes depending on the market, with 15% standard at the moment and 20% required for young buyers or people with few assets, as well as for second-home buyers. At times when banks are looking to increase their loans to home buyers, the deposit may drop to 10%. French banks generally require a 20% deposit.
Housing: interest rates for mortgages
These are closely tied to the Swiss National Bank’s Libor, although banks are free to set their interest rates and they do not always raise or lower rates at the same time. Banks will often offer a two-tier mortgage, with first and second rang having different interest rates. Second mortgages do not qualify for a first-tier lower rate, as a rule.