Affordability

Ability to sustain mortgage costs according to bank criteria.

Affordability (capacite financiere or tenue des charges) is the calculation banks perform to determine whether a borrower can sustain mortgage costs.

In Switzerland, banks apply the one-third rule: theoretical mortgage charges must not exceed 33% of gross income.

The calculation uses a theoretical rate of 5% (not the actual market rate), plus 1% for maintenance costs and 2nd rank amortisation.

Example: for a property at CHF 1,000,000 with 20% equity, theoretical charges are approximately CHF 63,300/year, requiring a gross income of at least CHF 192,000.

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