REAL ESTATE · 5 min read

Buying or renting in Switzerland: the calculation nobody does

Published 21 July 2026 · Updated 21 July 2026

In Switzerland, the buy-or-rent debate is saturated with received ideas. The reality: with one of the lowest home-ownership rates in Europe and high prices, the answer depends on a calculation — not a belief. Here it is, in full.

Step 1 — Can you buy? The two banking rules

• Equity: at least 20% of the price, of which 10% outside the 2nd pillar. For a CHF 800'000 property: CHF 160'000, plus roughly CHF 25'000 to 40'000 in purchase costs depending on the canton.
• Affordability: (mortgage × theoretical 5%) + maintenance (1% of value) + amortisation must stay below ~33% of the household's gross income.

Step 2 — The real cost of ownership

Once you own, your real cost is not your monthly payment: it is the sum of the unrecoverable costs — actual interest, maintenance, insurance, property-related taxes — plus the opportunity cost: the CHF 160'000 of equity tied up no longer earns a return elsewhere. Amortisation, on the other hand, is not a cost: it is forced saving.

Step 3 — The honest comparison

Illustrative example with an actual mortgage rate of 2%: interest CHF 12'800 + maintenance CHF 8'000 + opportunity cost of the equity (~3% of 160'000 = CHF 4'800) ≈ CHF 25'600 of unrecoverable costs a year, before tax. If the rent of an equivalent home is below that amount AND you invest the difference, renting can win financially — often the case in the big cities. Conversely, in the suburbs or with a long horizon and low rates, buying frequently wins. Taxation (imputed rental value, deductions — currently under federal reform) can tip the calculation: check the state of the law at the moment of your decision.

The SFM decision grid

• Horizon: less than 7–8 years in place? Buy-and-resell costs almost always eat the gain — rent.
• Stability: variable income or plans to go self-employed? Keep the tenant's flexibility.
• Real capacity: if the purchase completely empties your savings and your 2nd pillar, you become fragile at the first setback.
• Long-term intent: if the numbers work AND you see yourself there for 10 years or more, ownership brings stability and forced saving.