I’ve got a property in Australia where my mortgage arte is currently 7%. I’m moving to Zurich next month. I was thinking about trying to refinance my mortgage with a Swiss bank (borrowing in CHF to repay the A$ mortgage). I’ve got a few questions: -
Do Swiss banks provide loans for property offshore? Is this something that would be difficult to do? What is the average approx. interest rate payable on a Swiss investment property loan?
The issue will be them taking effective mortgage security over the property. I explored this last year with UBS for a London property and gave up. In the end I took a London based CHF mortgage with Fortis.
CHF mortgages range from 0.5% over CHF LIBOR upwards, starting with 0.5% being a very competitive variable rate, through 1%+ for fixes of various lengths. 3 month CHF LIBOR is 2.80% right now. You have to shop around.
What you might want to look into is borrowing Eurodollars , which, while generally referring to USD, is any currency not native to the country from which you are borrowing (so in this case it would be more like EuroAussieDollars). Many of the larger banks which loan foreign currencies will do so at a cheaper rate than the local currency because they don't have keep the foreign currency in reserve as they do with their normal currency. Basically the interest earned on Eurodollars is free to them because there's no "overhead" (or next-best option) to not having them.
If you have collateral here in Switzerland it will not be a problem to get a loan for overseas property. I have doen this and it is a quick and painless process. If you do^not have any collateral I doubt if any bank would be willing to give you a loan for overseas property purchase. Also remember that once you have done this your info will be with the tax authorities and you will have to declare it as wealth.. To be taxed in Switzerland...