SHARE
COPY LINK
For members

MONEY

13 things that are actually ‘cheaper’ in Switzerland

Switzerland regularly tops rankings of the most expensive countries in the world and it is unlikely to win any prizes for being a budget destination. But not everything in the country costs a small fortune.

An 'open' sign in a shop window.
Surprisingly, some things are actually cheaper in Switzerland.Photo by Mike Petrucci on Unsplash

We asked our readers what they think is actually good value in Switzerland. Here is what you told us.

1) Single-day travel passes from local town halls

Many town halls around Switzerland offer single-day travel passes which allow local residents to travel on almost all of the Swiss public transport network for around 40 Swiss francs. To see whether you commune offers this service, see here.

Readers also pointed out that the SBB/CFF’s supersaver tickets can be good value. And purchasing a half-fare travel card for the rail network is also considered a good investment. This half-fare card provides a 50-percent discount on rail, bus and boat travel across Switzerland. It costs 185 francs for the first year and then 165 francs for subsequent years.

2) Public transport for children

The SBB/CFF Junior travelcard allows children from the aged of six up to the 16th birthday to travel for a whole year for 30 Swiss francs if they are travelling with a parent who has a valid ticket. This Junior travelcard is also free from the third child on. More here

3) Eating at the Migros restaurant

The restaurants of the supermarket chain Migros are, by Swiss standards, a good, cheap place to eat with main course at lunchtime costing around 10 Swiss francs. There is also a reasonable breakfast option with a couple of bread rolls, butter and jam and a hot drink costing around 7 francs.

Another relatively cheap option in Switzerland are the set menus (Tagesmenü/menu du jour) that many restaurants offer at lunchtime.

4) Electronics

Several readers noted the prices for electronics in Switzerland were hard to beat, at least compared to elsewhere in Europe, partly because of the lower value-added tax rate in Switzerland (the standard rate is 7.7 percent).

One reader also noted that the warranty period is good in Switzerland. Two years is standard for new products.

5) Motorway tax sticker

Switzerland’s “spotless” and “top class” roads came in for praise from our readers who said the 40-franc sticker required to travel on the country’s motorway network was good value. There is a link to a map of the roads where this sticker is required here.

6) Schools

Switzerland’s public education system is excellent and – as a couple of our readers pointed out – absolutely free. In fact, this right to an “adequate” and free basic education is even guaranteed in the Swiss constitution.

With childcare also often based on parents’ income levels, this can be surprisingly affordable, as another reader noted.

The right to free, basic education is enshrined in the Swiss constitution. Photo by note thanun on Unsplash

7) University tuition

The tuition fees at Swiss universities are low by the standards of many other countries. At the prestigious ETH technical institute in Zurich, for example, tuition and semester fees total 649 francs a semester. But this has to be balanced against the estimated 16–26,000 francs in study and living costs students spend every year.

8) Good wine and beer

Our readers pointed out that supermarkets in Switzerland sell relatively good-quality wine and beer for much cheaper prices than you’d find elsewhere. 

9) City parking

A few people noted that car parking in Swiss cities is cheaper than “back home” with rates of 1 franc an hour not uncommon.

10) Pool and water park entrance fees

Both single-entry tickets and season passes for outdoor pools are good value in Switzerland, according to readers of The Local.

11) Ikea and H&M

A number of our readers pointed out that clothes at stores like H&M and furniture from Ikea are actually very similarly priced in Switzerland as compared with other countries. With wages, generally higher in Switzerland, this means these products are relatively cheap.

12) Fuel (petrol, diesel and gasoline)

Filling up a tank is surprisingly cheaper in Switzerland than in neighbouring countries, which is unusual, as prices for most goods are lower across the border. 

A reason for this is comparatively lower tax rates on petrol in Switzerland. Only Austria has lower fuel taxes than Switzerland (among Switzerland’s neighbours). 

“German, but above all French, ‘fuel tourists’” get their petrol in Switzerland, Blick reports.

So if you’ve been crossing the border to go shopping, fill up your tank when back on Swiss territory if you want to save. 

READ MORE: Where in Switzerland can you find the cheapest fuel?

13) Fresh air, mountains

Last but not least, many readers pointed out that many of the best things about Switzerland are actually free – from clean air and high levels of safety to the wonderful scenery and the amazing network of public footpaths that allow you to explore the county at a walking pace.

The ‘Blue Lake’ above Arolla in the canton of Valais. Entry cost: zero. Photo: AFP

Member comments

  1. All great points above. I’ll add a small one – the Migros brand Krauter Shampoo is fantastic, and a great value at 1 franc. Our family loves it.

Log in here to leave a comment.
Become a Member to leave a comment.
For members

COST OF LIVING

EXPLAINED: Why not paying off your mortgage in Switzerland can save you money

The idea is strange to most of us, but the majority of people in Switzerland choose not to pay off their mortgage - and save money in the process.

EXPLAINED: Why not paying off your mortgage in Switzerland can save you money

Many of us who have been raised with the goal of one day owning property will have one thing on our mind as soon as that deal is done: pay it back. 

From avoiding credit rating issues to not seeing the erosion of our hard-earned money due to interest, there are a number of reasons we want to get out of mortgage debt as fast as possible. 

But in Switzerland, due to a variety of factors, it sometimes makes more financial sense not to pay off your mortgage – or at least to pay off less than you can afford to. 

Estimates vary, but statistics show that a majority of Swiss do not pay their mortgage off before retirement. 

Not only that, but Switzerland has the highest mortgage debt per capita of any country anywhere in the world, according to OECD figures. 

READ MORE: Buying property versus renting in Switzerland: What is actually cheaper?

Here’s what you need to know. 

Why would you not want to pay your mortgage off in Switzerland? 

There are a number of factors which contribute to Switzerland’s unique framework when it comes to mortgages. 

These include the country’s wealth tax, the dual system of mortgages and traditionally low interest rates. 

At this stage, it is important to mention that while a majority of people don’t pay off their mortgage during their working life, this does not mean they skip out and run for the Caymans upon retirement (although presumably some do). 

Instead, it means people are not actively paying off their principal, but investing the funds in an account with their bank. 

When they retire, they use the money in the account to pay off their mortgage debt – and keep the change. 

This sounds complicated because it is – and is explained at length below. 

For more information on buying property in Switzerland, check out this link. 

The Swiss mortgage system: Dual obligations

The reason you may not want to pay your mortgage off in full in Switzerland is partially because of the unusual structure of mortgage obligations. 

The Swiss mortgage system differs from that in most countries in that you effectively take out two mortgages when you buy a property, or more accurately, the mortgage is split into two mortgage obligations. 

The first obligation resembles a traditional mortgage seen abroad, in that it has an indefinite repayment period and covers the majority of the purchase price. 

This will usually be around 60 percent of the total purchase price, less the deposit and the amount included in the second mortgage obligation. 

The second will cover approximately 15 percent of the purchase price. 

Importantly, this will have a fixed repayment period, usually around 15 years (at around one percent per year) or by the time you retire (if shorter than 15 years). 

EXPLAINED: How to save on your mortgage in Switzerland

While you must pay off this amount, the ‘optional’ part relates to the other component of the mortgage. 

Mortgage rates in Switzerland are low by international standards. Photo by PhotoMIX Company from Pexels

Should you choose direct or indirect amortisation? 

Amortisation is an accounting term which refers to reducing the book value of a loan or debt, but basically means paying off your mortgage. 

In most countries, the only option is ‘direct amortisation’, which means paying money to the bank to cover your debt. 

Direct amortisation not only reduces the debt, but the interest (as the interest is based on the quantum of the debt). 

Indirect amortisation is something relatively peculiar to Switzerland and is where the idea of not paying off your mortgage comes in. 

Finding a flat in Switzerland: How to stand out from the crowd

Swiss financial advice site Beobachter points out that the system in Switzerland is effectively set up to allow long-term non-repayment of mortgages. 

“In hardly any other country are the amortisation standards as lax as in Switzerland… In no other national economy can debts remain “forever” in this way”, they explain.

Instead of paying off the mortgage directly, you make regular payments into a ‘third pillar’, which is basically an investment account or fund offered by the same bank. 

This money is then used as a security against the property. 

Keep in mind the amount you need to repay will be the value of the property when you bought it, not the value of the property when you retire. 

During this time you will continue to pay interest on the debt.

This interest will not decrease as you are not paying off the principal, although Switzerland’s low interest rates make this an attractive option. 

Eventually, the debt will be taken from the third pillar. Usually, this will happen when you retire, but you can also sell the property, organise some form of reverse mortgage or sell it to your kids and have them rent it to you, among other options. 

Why is this beneficial?

The main reason this is advantageous is for tax purposes.

In Switzerland, you can deduct mortgage payments from your tax. Also, the money you pay into a third pillar is not taxable. 

Another major reason is the country’s wealth tax, which is not as unique but still relatively uncommon. 

Property: Why you can be taxed four times over for owning a home in Switzerland

In most countries, you pay tax primarily on your income. In Switzerland, you are liable to be taxed on your total wealth as well (under one percent per year). 

The wealth tax is calculated by your total assets minus your total debts. If you have significant debts – including a mortgage – then this will reduce your wealth tax. 

Importantly, the money in your third pillar does not count towards your wealth tax. 

Look, I just clicked on this article to find out about my mortgage, can you speak English please? 

While this all sounds incredibly complicated and you are advised to seek the support of a licensed agent, the calculus is relatively simple. 

Calculate the amount you would pay if you invested the money in a third pillar – keeping in mind the tax savings – by the end of the mortgage, minus the interest payments and the mortgage principal upon retirement. 

Compare this to the amount it would cost you to pay off the mortgage completely, including interest payments, keeping in mind that your tax savings will decrease over time as your regular payments decrease as you pay more of the mortgage off. 

Generally speaking, your financial advisor will present this to you as comparable percentages over time, which means your income will be a major factor in your final decision, as will your retirement plans and the tax rate in the canton and municipality you live in. 

EXPLAINED: How where you live in Switzerland impacts how much income tax you pay

It is important to note that your bank is likely to offer a combined form of both direct and indirect amortisation, which will allow you to spread the risk/burden somewhat. 

Editor’s note: Please keep in mind this report is intended as a guide only and should not replace legal and financial advice from a qualified agent or advisor. 

SHOW COMMENTS