in

Mortgage costs now more expensive than renting, says Credit Suisse


A new analysis by Credit Suisse has revealed that, for the first time in 13 years, the cost of renting a house or apartment in Switzerland is now cheaper than annual mortgage payments. The Swiss bank said that a sharp increase in the interest rate for mortgages has caused the phenomenon.

Rental costs now less than mortgage payments

According to the study, the cost of buying a house in Switzerland has increased dramatically in recent years. Credit Suisse found that while the average cost of renting a 4,5 room apartment in Switzerland is 22.440 Swiss francs a year, the annual cost of mortgage payments on the same property on a five-year 80-percent deal is 23.128 Swiss francs.

Credit Suisse found that homebuyers face a 3,1 percent surcharge compared to renters in 2022. This is a dramatic rise in the cost of buying a house as in 2021, average annual mortgage payments were 15,5 percent less than average rent.

Interest rate rises blamed for sky-high mortgage costs

This is the first time since 2009 that, on average, mortgages have cost more a year than renting. The study also did not take into account the cost of utilities and housing taxes, which can make buying a house even more unaffordable.

Credit Suisse blamed the heightened cost on mortgage interest rate increases, which rose from 1,1 percent in 2021 to 2 percent by the end of April 2022. Since the start of 2021, interest rates accounted for 45 percent of the average cost of a mortgage in Switzerland.

In concluding the report, Credit Suisse said that the price rises will hit new homeowners the hardest and will force many to postpone buying a house altogether. With the cost of energy and other goods and services also expected to rise, the prospect of owning a home in Switzerland seems further away than ever.

By clicking subscribe, you agree that we may process your information in accordance with our privacy policy. For more information, please
visit this page.

Report

Comments

Express your views here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Disqus Shortname not set. Please check settings

Written by Admin

How bad must NYC crime get before other pols start backing Mayor Adams?

Sky-high gas prices arrive in Switzerland as part of Europe-wide wave