Tenants pay an average of 8 to 9 billion Swiss francs more than property owners each year. Calculated on a monthly basis, this amounts to between CHF 130 and CHF 730, depending on the amount of the mortgage and the size of the property. This means that owners save between 1,600 and 8,800 francs each year compared to tenants.
Due to the extremely favorable mortgage rates, homeowners have been benefiting for several years now. Although it is generally the case that when mortgage rates fall, the reference rate for rents also falls, this does not fall nearly as quickly as the mortgage rate. The result: owners benefit more than tenants.
However, the low mortgage interest rates are not the only reason why owners are better off. The option of not having to pay off the first mortgage and thus being able to deduct debt interest from taxes for decades provides another advantage on the part of owners. For many Swiss people, owning their own home is a great dream in life, which not everyone can afford for a long time now. The reason for this is the sharp rise in property prices in recent years. According to a study by moneycab.com, two thirds of all Swiss are now excluded from the Swiss real estate market.
Wealthy people clearly benefit more
A property always entails running costs. The amount of the costs is strongly determined by the amount of the mortgage and the required interest payments and amortization. The following rule of thumb applies to this context: the lower the loan-to-value, the greater the savings. This is due to falling interest costs and the elimination of amortization. The law only provides that real estate owners amortize the second mortgage. At the same time, debt up to 65 percent of the market value does not have to be paid. Especially people with higher incomes benefit from this situation, because due to the tax progression it often makes more sense not to amortize further. In addition, they often have sufficient equity to take out a first-rank mortgage. The result is that wealthy households benefit, while low-income households have to pay rents that become more expensive every year.
Condominium with 4 rooms is cheaper
Tenants living in a 4-room apartment have to pay an average of 1,600 Swiss francs per month. A property owner, on the other hand, pays only 870 francs interest for the same apartment and spends about 500 francs per month on amortization. If tenants buy the property instead of renting, they could save between 10 to 50 percent on their monthly costs. The potential savings depend to a large extent on the size of the mortgage.
According to the data from moneycab.com, 45 percent of all customers ask for first-priority financing. 55 percent are looking for a mortgage that exceeds two-thirds of the market value. The latter mortgage must inevitably be amortized. With the help of this data, it is possible to calculate an average value for the amount saved by homeowners per year. In direct comparison with renters, property owners save an average of 6,000 francs each year.
Savings potential increases with size
How much savings potential there is depends not only on the size of the mortgage. The number of rooms and square footage also factor into the equation. As a rule of thumb, the more rooms in the property, the more savings potential the property has when purchased. The exact reasons for this can only be speculated on. But an important factor is certainly the strongly diverging supply situation for rental and owner-occupied properties depending on the number of rooms. 4- to 5-room apartments are much more common on the property market than 1- to 2-room apartments.
With the help of the buzzer of all rental households and the distribution of tenants among 1- to 6-room apartments, the annual losses of tenants, resp. the savings of homeowners are determined. In 2015, a total of 3 were located in Switzerland.6 million households. Of which lived 2.03 million. Households renting. Of these, in turn, one-third each lived in a 3- to 4-room apartment in 2013 and 2014. For 2015, the statistics only make a statement about the total number of all rental households. The distribution in detail was not raised. Therefore, we assume the same proportional distribution of rental apartments. For the year 2016, no data from the SFSO regarding distribution is available at the time of writing. Therefore, the calculation could only be made for the years 2013 and 2015.
Losses on the renter side were likely at least as high in 2016 as in 2015, as the average interest rate on mortgages was lowered even further. Looking at Switzerland as a whole, tenants pay between 8 and 9 billion francs more than owners per year.
Tip from the editors: The rent deposit resp. Rent deposit is always also a criterion in the selection of a solvent tenant. In this case, rental deposit insurance companies in Switzerland offer a "pre-confirmation" that can be attached to the application dossier and thus testify that one has a positive credit report.