Is buying cheaper than renting?

At low interest rates often yes, but only if you count every cost: mortgage interest, around 1 % of the purchase price per year for maintenance and running costs, and the return your tied-up equity would have earned elsewhere. Amortisation does not belong in the comparison: it is saving into your own pocket, not a loss.

How much equity do I need to buy?

At least 20 % of the purchase price, of which at least 10 % must be hard capital such as bank accounts, securities or pillar 3a. On top come the purchase costs, which vary by canton. The maximum purchase price calculator shows you in a minute what purchase price your funds can stretch to.

What is the imputed rental value (Eigenmietwert)?

A notional income that owners currently pay tax on for living in their own home; in return, mortgage interest and maintenance are deductible. Switzerland approved the switch to abolish it at the ballot box in 2025, but the imputed rental value continues to apply until the change is implemented. So factor it in for now.

What happens if interest rates rise?

Your housing costs rise with them: immediately with a SARON mortgage, at the end of the term with a fixed-rate mortgage. That is exactly why the bank tests affordability at 5 % instead of the current rate. If you pass that calculation, you will get through the expensive years too.

Huusfink Guide19 August 2026

Rent or buy: which pays off in Switzerland?

“The mortgage costs less than my rent” is the most common miscalculation in property buying. The honest comparison has more line items, and it still often comes out in favour of buying. Here is how to compare fairly.

The wrong comparison and the fair one

Wrong: monthly rent against mortgage interest. Fair: monthly rent against everything the home costs on an ongoing basis, plus what your money would have earned elsewhere. On the ownership side there are three items:

→Mortgage interest: the actual rate on the mortgage, not the bank's imputed 5 %.
→Maintenance and running costs: as a rule of thumb around 1 % of the purchase price per year. As a tenant, your landlord pays this through the rent; as an owner, you do.
→Forgone returns: your equity sits in the house instead of a portfolio. What it would have earned there is a real cost of buying.

Amortisation is deliberately missing from the list: it reduces your debt and builds wealth. You feel it in the monthly load, but in the rent-versus-buy comparison it is not a loss.

A worked example

An apartment for CHF 1'000'000, 20 % equity, a mortgage of CHF 800'000 at 1.5 %: interest CHF 12'000, maintenance around CHF 10'000, forgone returns on CHF 200'000 at an assumed 2 % another CHF 4'000. That makes CHF 26'000 a year, or just under CHF 2'200 a month in real costs. If a comparable rental apartment costs more, the numbers work in your favour; if rates rise to 3 %, the total tips to around CHF 3'200 and the comparison looks different. Run both scenarios, not just the friendly one.

What often gets forgotten

→Purchase costs: depending on the canton, up to over 3 % of the price for transfer tax, notary and land registry, paid from savings. Details in the canton comparison.
→Taxes: today you pay tax on the imputed rental value, but may deduct mortgage interest and maintenance. The approved switch only changes that once it is implemented.
→Value changes: prices can rise and fall. Buying is not a bet on capital gains but a purchase of housing security; anything on top is a bonus.
→Reserves: the heating, roof and kitchen age in your home too. Without a renovation pot, the first big repair turns into a loan.

Not everything is money

Renting buys you flexibility: give notice, move on, no concentration risk. Buying buys you control: nobody can terminate your home, you remodel as you please, and in old age you live cheaply once the mortgage has shrunk. Which currency matters more to you is not something a spreadsheet can answer. The financial question, though, it can: if affordability and equity check out and you want to stay longer than five to ten years, buying at least deserves a serious calculation.

Frequently asked questions

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