The housing loan
- Purpose of the housing loan
The housing loan is intended for the purchase, construction, or renovation or enlargement of real estate located worldwide, as well as the purchase of a mobil home or land in Switzerland or abroad. It also includes, for example, construction of a swimming pool, reimbursement of a mortgage or housing loan, etc.
- Interest rate
The monthly interest rate is 0.29%, including death/disability insurance, unless changed in the meantime. It is fixed for 4 years and then variable according to the rate in force for new housing loans,
The monthly interest is paid at an effective discount rate as the interest rate is applied monthly on the remaining capital.
- Duration of the loan
The minimum duration of the housing loan is 24 months and the maximum is 144 months.
- Amount granted
The minimum amount that can be requested is CHF 5,000,
The maximum amount which may be granted to a member for a housing loan depends on his/her contractual status, the level of debt, and is determined by the following components:
The maximum possible amount which a member may obtain is CHF 250,000, as long as the borrower has no outstanding loan(s) with the Mutual Association. If this is the case the amount due on the current loan(s) will be deducted from the amount previously calculated.
- Debt ratio
The monthly loan repayment of one or more housing loans cannot exceed 35% of the net monthly salary, including the cost of any outstanding ordinary and/or housing loans,
The total monthly cost (including any external bank loan, rent in case of purchase of a second home, etc.) cannot exceed 50% of the net monthly revenues (take-home pay and any other proven income),
If the total monthly cost of the transaction is between 45% and 50% of the revenue, which is a significant risk for the borrower, the agreement of the Board of Directors is mandatory,
Proven income can include, for example, the spouse’s salary (with the last 3 payslips) as well as rental income (proven by an ownership title, a lease agreement and a bank statement showing the last 3 lease payments).
- Justification of the utilization of the funds for housing purpose
When the transaction for which the loan has been granted has taken place, proof must be provided in the form of official documents such as deed of sale, receipt invoice, etc., within 12 months from the date of the payment of the loan,
When a borrower does not justify the full amount granted, or if the documents submitted are not official, the ordinary loan rate is applied for the remaining duration and on the amount not justified,
Official documents justifying the loan that are not in English or French must be officially translated.
The Mutual Association proceeds with the study in 2 steps:
A. A preliminary study: this study determines if a housing loan could be granted, and the conditions, subject to confirmation of the final study.The necessary documents to be provided at one time are:
- the loan application form duly completed;
- a copy of the current contract of employment;
- the last pay-slip;
- the last Pension Fund statement,
- f. if the borrower has external loans/debts other than the one with the Mutual Association (incl. car leasing, credit cards, debt collections, housing loan, mortgage loan, consumer loan) the last statements must be added to the request.
B. The final study: this study will confirm whether the financial operation is feasible and if the loan can be approved. The additional documents to be provided at one time are:
- the information for a housing loan form duly completed;
- all documents requested in the information for a housing loan form. These documents must be official;
- in case of external financial obligations (including credit cards, mortgage loans, debt collections) the last statements will have to be provided (amount due, interest rate applied).
Members who wish to apply for a housing loan and have all the documents required for the final study can send them with the initial application.