If you want to build, you can rarely pay for building a house or buying a house and renovating it at one go and are often forced to borrow the missing amount in the form of financing. Of course, nobody wants to pay more than they have to and is always looking for the cheapest financing.
This is given in Germany in the form of cheap Good Credit loans
But these are usually tied to certain requirements and can only be used once in a lifetime, except in the case of special funding. Building loans from German banks are still quite cheap compared to other loans and loan terms, but not more, since Swiss banks can often undercut the interest rate that German banks charge.
And: Swiss banks not only grant construction loans from Switzerland to Swiss but also to Germans. The advantage is that the interest on a building loan from Switzerland is often only 2% – and in Germany, this can often only keep up with Good Credit and hardly a bank. And ultimately, it is not a question of what amount you borrow, but how high the interest rate is – this ultimately always tells you whether a loan is cheap or not.
But where there is light, there is also shadow. A disadvantage of a construction loan from Switzerland is that it rarely runs in dollars but in Swiss francs or yen. That means: in addition to the interest, there is a currency risk – first of all in that you have to convert the required amount into francs. Since the franc is very stable, it is less valuable than the dollar – you have to borrow more Swiss francs than the dollar. With a required capital of 200,000 dollars, you have to with an exchange rate of z. B. Borrow 1.26 252,000 Swiss Francs (SFR).
If the value of the dollar deteriorates against the Swiss franc
(If the amount was recorded in Swiss francs), more must be paid back. Conversely, the exchange rate risk can of course also be favorable if the price of the dollar increases.
Example: If a building loan from Switzerland is taken out for 200,000 dollars at an exchange rate of 1.26, the loan amount is 252,000 Swiss francs. Should the exchange rate of the dollar deteriorate to 1.20, instead of 200,000 dollars 210,000 dollars plus interest must be repaid – 5% more? If the dollar exchange rate improves to an exchange rate of 1.30 dollars, however, just under 194,000 dollars plus interest would have to be repaid.
If possible, a dollar loan should therefore always be taken out, even if the interest should be higher, in order to have currency security. The currency risk is only worthwhile for investors who may not care about small fluctuations or who have experience with currency trading.
However, there are also many other risks with a cheap building loan from Switzerland – the often very low-interest rates are often only granted for a period of 1 – 2 years, as a bonus, as there is very little capital at the beginning for a borrower the house construction is in place.
After this period, the interest on a building loan from Switzerland is often at the same level as the interest of German banks – you only save at the beginning and have to pay less for the time being. However, if interest rates are raised above the level of German banks, the situation is much worse. The period over which the favorable interest is granted varies depending on the contract because longer and shorter ones are also possible.
In addition, there are not only serious providers in Switzerland, because the high demand from Germany for a cheap Swiss building loan has also got around – that means that you should always obtain information and experience from other customers before concluding a contract, z. B. in various forums on the Internet.
The following also applies to a construction loan
From Switzerland as well as a construction loan from Germany: You must be able to pay the installments no matter how cheap the interest rate is. So you should always have at least 20% of your net income per month, minus all costs and installments, otherwise, the air can quickly become scarce in the event of an emergency.
In addition, the same requirements apply to a building loan from Switzerland as in Germany – although SCHUFA is not taken into account, those who do not have sufficient creditworthiness, which the Swiss banks want to have documented in detail in the form of various documents, will not get a building loan Switzerland.
Without a secure and comparatively high income, it will be nothing. Basically, it can be said that those who do not receive a building loan from a German bank due to their inadequate credit rating do not get a building loan from a Swiss bank.