Swiss homeowners face tighter mortgage rules

by Malcolm Curtis | | February 3, 2012

Mortgage rates have never been so low in Switzerland but the days of easy money may be numbered. Despite a tepid economy, the rock-bottom rates continue to pump Swiss property prices higher, a development that is worrying financial regulators seeking to avoid a bubble.

In a bid to staunch the flow of credit for real estate, the finance ministry has proposed stiffer capital requirements for Swiss mortgage lenders, following direction given by the government last August. The complex initiative met with opposition from the banking industry in hearings that ended in January.

The Swiss Bankers Association says the proposals are too rigid and expensive to implement, while their negative impact on mortgage clients and the real economy “cannot be reliably estimated”. But the Basel-based association said that it would agree to temporary measures that would require new mortgage clients to increase their down payments.

“The SBA rejects additional tightening of capital adequacy requirements by the banks in this (mortgage) area,” SBA spokeswoman Sindy Schmiegel told

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About Malcolm Curtis

Freelance English-language communications professional (writing, editing, translations) based near Geneva, Switzerland. Let me know if I can help you.
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