I have heard of that in theory, never in practice. That really sucks.
It’s also one of the reasons I am paying down my mortgage beyond the necessary required, even if not completely tax efficient re eigenmietwert, which I think does not make a huge difference in the end anyhow.
Is that the whole story?
I discussed such a theoretical situation with my bank and they said so long as the monthly payments continued OK then no problem.
Agree. Could it be that the mortgage is coming due for renewal and the wife doesn’t have sufficient income to maintain it on her own? The Swiss don’t seem to do 30-year mortgages like the USA, for example.
Different banks have different rules. My banker at ZKB mentioned that they reassess financial affordability every 12 years, regardless of the mortgage term.
Yes, and don’t forget, death of a partner isn’t the only circumstance you have to be aware of.
Mortgage eligibility is based on a stress test by the bank. If I recall correctly, the criteria the bank used was: would be mortgage be affordable with a third of your income, if interest rates hit 5%.
Once you retire, this stress test still applies, except now it is your pension that is used instead of your salary. And your pension is normally quite a bit lower than salary.
So the bank can pull your mortgage based on that, if they decided to.
And usually assuming 1% maintenance, so effectively 6%.
I guess it can vary between mortgage contracts, but the ones I’ve seen usually allow for re-assessment at any point in time. In practice, they might only do this at trigger points e.g. when you lose job, if economy looks bad, if mortgage is renewed.
I wouldn’t take out a mortgage if I wasn’t able to finance the property, that’s why I don’t buy a house 
I take out a mortgage for a number of reasons: Offsetting imputed income tax, liquid assets. Buying with a “real” mortgage, I mean where I could only afford the ~30%, is not worth the risk. Renting gives much more freedom to maneuver through difficult times when income drops significantly (and you’re rather broke).
Yes and no. I understand your points but if you can afford it, owning can be much cheaper… certainly it is for me. An equivalent house to rent would probably cost 50-60k per year in lost rent, whereas I pay only a fraction of that currently in mortgage and maintenance.
As we are a couple who both earn, this also makes the situation considerably easier, in dealing with the bumps in the road (so far).
The other thing to remember if prices fall the bank can insist you increase your deposit to 20% of market value, not the original purchase price. This clause was invoked in the 1990’s when Swiss property fell significantly.
This is the situation we are in. We had a sale lined up but it fell through for our place. We are trying to switch mortgages but ran out of time and the bank are starting to force a sale. They want all the mortgage back. We can pay 1/3rd back if required giving the bank 75% equity. So far bank says no. We have small kids and the house is perfect, in the kern zone, Fehraltorf, so 28mins train to Zurich HB, former kindergarten too. We have been mostly living off savings since the kids were born. Motivated sellers but sadly all recent buyers so far want to gut the insides and aren’t coming near the earlier offer.