Buying a house: how much can the home cost??

How much your new home can cost depends on how much money you have and earn.

Our purchase price calculator in the practical filter function shows at a glance how high the price for your home may be. To the purchase price calculator.

We have also compiled the most important rules of thumb for home financing for you.

Provide sufficient equity

Financial service providers do not lend the entire amount, but usually require 20% equity for the house purchase. In addition to traditional savings, securities, loans or advance inheritance payments, this can also include money from the pension fund as well as the 3. Be a pillar. In addition to the 20% for the purchase of the property, there should also be sufficient equity reserves, since the purchase of the property also incurs purchase and notary fees.

There is also the risk that the appraised value of a property is lower than the purchase price from the point of view of the financial service provider and that he therefore does not want to finance 80%.

Ensure affordability

A homeowner must also factor in annually recurring costs. A rule of thumb says that the running costs amount to 6% of the purchase price. This percentage applies when 20% of the equity is in the home. The 6% rule includes the mortgage interest, the maintenance costs and the amortization of the mortgage. It is based on the average mortgage rate of the last years. The 6% rule does not take into account the tax effect, which can vary from canton to canton.

According to another rule of thumb, the housing costs determined with the 6% rule must not be higher than one third of the income.

Example

If Max Muster’s monthly housing costs amount to CHF 3,300, his monthly income should be at least CHF 9,900. If Max Muster’s income is smaller, it is possible that the financial services provider is skeptical about the financing and has concerns about whether the residential property is sustainable for Max Muster in the long term.

Purchase price: 660’000 = 100%
Equity capital: 132’000 = 20%
Annual housing costs: 39’600 = 6%
Annual gross income (excluding 13. monthly salary): 118’800 = 18%

Calculate financing

Based on your own capital and your annual gross income, you can use the mortgage calculator to determine whether you can afford your own home right now. To the mortgage calculator.

Calculate risks

Even those who calculate carefully take risks. If Max Muster’s income decreases due to job loss or disability, he may no longer be able to afford the housing costs and may have to sell the home.

It is not certain whether he will be able to sell his house at the original purchase cost or at a profit. It may be necessary to sell a house at a loss. Especially if, for example, the building fabric is defective, the house is in an unfavorable location or the maintenance of the house was neglected.

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