High property prices and the need for a 20 percent deposit can make the costs of buying a house in Switzerland prohibitive, leading many to choose renting as a cheaper option. 

However, economic uncertainty – such as the fallout from Russia’s Ukraine invasion and the lingering impacts of the Covid pandemic – can put upward pressure on interest rates. 

A Credit Suisse study from 2022 found that for the first time in 13 years, renting was actually a cheaper option than buying in the longer term, due mainly to a rise in interest rates. 

According to the researchers “the first time in a long time, buyers or owners of a condominium have to pay more than for a comparable rental apartment”. 

EXPLAINED: How to save on your mortgage in Switzerland

The researchers compared advertised property prices and rents, comparing rental expenses with the costs of a five-year fixed mortgage on a 4.5-room apartment. 

Renting was a cheaper option than buying due to a 45 percent increase in mortgage interest since the beginning of 2021. 

On a one-to-one comparison, the study found that paying a mortgage on a 4.5-room apartment would cost you CHF23,128 per year, compared to CHF22,440 per year to rent. 

Of course, in the longer term those who buy a house will own some or the whole home as opposed to those who rent. 

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Economic uncertainty fuels change in Switzerland

This represents a change in Switzerland, where low interest rates had made purchasing a property actually cheaper over the long term. 

A report from 2020 found that buying a house in Switzerland can save you a considerable amount of cash over time – particularly for families. 

The report, prepared by Switzerland’s Raiffeisen Bank, showed that despite rising house prices – it was still considerably cheaper to buy in the long term when living in Switzerland. 

Average rental payments for a 3 to 4.5-room apartment in Switzerland – when compared to mortgage repayment costs – are 20 percent higher than buying a house of the same size on average. 

More information about renting and buying property in Switzerland can be found at the following link. 

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