Buying an apartment to let on Airbnb in Montreux usually starts with a bank, not a listing. Swiss lenders apply fixed rules on equity and affordability that are stricter than many foreign buyers expect. This guide explains how a mortgage for a Montreux short-term rental is assessed, with a worked example.
The mortgage rules in brief
- Maximum loan
- 80% of the purchase price or valuation, so at least 20% equity[1]
- Hard equity
- At least 10% of the price from your own funds, not pension-fund money[1]
- Affordability
- Calculated interest about 5% + 1% maintenance + amortisation; housing costs normally at most one third of gross income[2]
- Example
- A CHF 1,200,000 apartment needs about CHF 240,000 equity and about CHF 212,000 gross income if no rental income is counted (illustrative)
- Rental income
- Short-term income is variable; lenders often discount it, so ask in writing
Short answer: expect to fund at least 20% of the price in equity (half of it from non-pension money) and to pass an affordability test that uses a calculated interest rate of about 5%, not today’s market rate. On a CHF 1,200,000 apartment that means roughly CHF 240,000 of equity and, if the bank counts no rental income, about CHF 212,000 of gross annual income.[1][2]
In this guide
What Swiss lenders check first
Swiss banks follow self-regulation guidelines from the Swiss Bankers Association, which the financial regulator FINMA recognises as a minimum standard.[1] Three rules shape almost every purchase:
- Loan-to-value. The first mortgage and any second mortgage together may not exceed 80% of the purchase price or valuation, so you need at least 20% equity.[1]
- Hard equity. At least 10% of the price must come from your own funds, not from pension-fund (second pillar) money.[1]
- Affordability. Lenders test whether you could carry the loan at a calculated interest rate of about 5%, plus about 1% of the value for maintenance and the required amortisation, with housing costs usually not above one third of gross income.[2] Individual banks set their own parameters, so treat these figures as the common pattern, not a promise.
A worked example: a CHF 1,200,000 apartment
This is illustrative arithmetic, not a quote. It assumes the bank counts none of your rental income and that the second mortgage is amortised to two thirds of the value within 15 years.[1]
| Item | Amount (CHF) |
|---|---|
| Purchase price | 1'200'000 |
| Equity at 20% (of which at least 120'000 hard equity) | 240'000 |
| Mortgage at 80% | 960'000 |
| Calculated interest at 5% | 48'000 a year |
| Maintenance at 1% of value | 12'000 a year |
| Amortisation: (960'000 − 800'000) ÷ 15 years | about 10'667 a year |
| Total calculated cost | about 70'667 a year |
| Gross income needed under the one-third rule | about 212'000 a year |
Purchase costs such as notary and land-registry fees and transfer duty are not in the table; lenders expect you to fund them separately from your equity.
How rental income counts
For a property you will let, a lender may take part of the expected rental income into account instead of relying on salary alone. Short-term income is variable, so banks commonly discount it, ask for a track record or count it only partly; some prefer to see a long-term lease scenario as the base case. Policies differ, so ask each lender in writing how it treats short-term rental income before you rely on it. Our Montreux earnings guide and the long-term vs short-term comparison give realistic revenue ranges you can show a bank.
Primary home, second home or investment?
The purpose of the property changes the conditions. Owner-occupied homes get the most favourable terms; a second home or an investment property is usually treated more cautiously, with more equity and stricter affordability. Our second home vs primary residence guide explains why this classification also matters for letting rules. Tell the lender how you intend to use the apartment: a mortgage agreement and a condominium regulation can both restrict short-term letting, so check them before you sign (see short-term rental in a condominium).
Pension money and equity
Early withdrawal of pension capital for home ownership is generally limited to your own primary residence, so it normally cannot fund an investment apartment.[3] Plan your 20% equity from savings, a gift or an advance on inheritance, and keep the paper trail of where each franc came from.
Foreign and non-resident buyers
Non-residents of Switzerland face two separate hurdles: the federal Lex Koller restrictions on buying second homes and holiday apartments, and stricter lender requirements.[4] Read our Lex Koller guide and the non-resident owner tax guide before you spend time on bank meetings.
Documents to bring to the first meeting
- Identity, residence permit if applicable, and recent payslips or tax returns.
- Proof of equity and its origin.
- The sales file: land-register extract, condominium regulation, last assembly minutes and renewal-fund balance.
- For a rental: the registration position, an income forecast and, if you hire one, the management mandate.
Tax on mortgage interest
Debt interest is generally deductible against your taxable income, including rental income, within the limits of cantonal and federal rules.[5] The deduction, your tax status and whether letting counts as private asset management all depend on your situation, so confirm with a fiduciary; the tax and VAT guide sets out the framework and the running costs guide shows where financing fits in the budget.
Buying to let in Montreux?
RivieraHost forecasts income for the apartments you are considering and manages them on a flat 20% commission, so you walk into the bank with realistic numbers.
Talk to usRelated reading: Buying an apartment in Montreux · Lex Koller · How much you can earn
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Frequently asked questions
How much equity do I need to buy a rental apartment in Switzerland?
Lenders typically finance at most 80% of the purchase price or valuation, so you need at least 20% equity, and at least 10% of the price must come from your own funds rather than pension money. Banks may ask for more on investment properties.[1]
What interest rate do Swiss banks use for the affordability test?
Most lenders calculate with a theoretical interest rate of about 5%, plus about 1% of the value for maintenance and the amortisation of the second mortgage, and expect housing costs of no more than one third of gross income.[2]
Will a bank count my Airbnb income?
It depends on the lender. Short-term income is variable, so banks often discount it, ask for a track record or count it only partly. Ask for the policy in writing before you rely on it.[2]
Can I use my pension fund to buy a short-term rental?
Early withdrawal of pension capital for home ownership is generally limited to your own primary residence, so it normally cannot fund an investment apartment.[3]
Can a foreigner get a mortgage to buy in Montreux?
Non-residents face the Lex Koller restrictions on second homes and typically stricter lender requirements. Check eligibility before spending time on financing.[4]
Sources
- Swiss Bankers Association (swissbanking.ch), guidelines for mortgage lending, recognised by FINMA (finma.ch) as a minimum standard — 80% maximum loan, 10% hard equity, amortisation to two thirds within 15 years — swissbanking.ch
- HEV Schweiz (hev-schweiz.ch) and lender practice — calculated interest of about 5%, 1% maintenance and the one-third affordability rule; individual lenders vary — hev-schweiz.ch
- ch.ch, the Swiss authorities’ portal — early withdrawal of pension capital for home ownership, own primary residence — ch.ch
- Federal Act on the Acquisition of Real Estate by Persons Abroad (Lex Koller, SR 211.412.41), fedlex.admin.ch — fedlex.admin.ch
- Federal Tax Administration (estv.admin.ch) and Vaud cantonal tax administration (vd.ch) — deduction of debt interest; rules differ by canton — estv.admin.ch