What does "Belehnung" mean?

The lending value differs from the market value and the tax value. Banks estimate it depending on the property type using models and comparable data or via an on‑site appraisal. If the purchase price is higher than the lending value, the bank will generally finance only a percentage of the lower value. That increases the requirement for equity. Conversely, a low purchase price or a highly sought‑after property can support a higher lending value, which simplifies financing as long as affordability is met.

In Swiss practice, many institutions finance up to around 80 percent of the lending value. Mortgages are often split into ranks: the first rank covers roughly two thirds of the lending value and is considered particularly well secured, so interest rates are typically lower. The second rank covers financing up to the maximum share and usually must be amortized within about 15 years or by retirement. This structure reduces risk by bringing the lending ratio back to a conservative level over time.

An example makes this concrete. Suppose the purchase price is CHF 1,000,000 and the bank sets the lending value at CHF 950,000. With an upper limit of 80 percent, it will finance at most CHF 760,000. Two thirds of the lending value correspond to about CHF 633,000 (first rank). The difference of roughly CHF 127,000 forms the second rank and must be amortized. The remaining amount, including additional acquisition costs, must be provided as equity. This shows how the lending value and the lending ratio determine the maximum loan amount and the repayment rules.

The lending ratio directly affects the price and terms of financing. The higher the lending ratio, the stricter the amortization requirements and, as a rule, the higher the interest margin. The lending ratio also influences affordability: banks calculate notional interest, amortization and ancillary costs so that housing costs remain affordable even in less favorable interest rate phases. If the market value later falls significantly, the effective lending ratio rises. In such situations the bank may require additional amortization or more equity at renewals or adjustments; if values rise, the ratio relaxes accordingly.

For buyers this means: increasing the equity share or negotiating a realistic purchase price lowers the lending ratio and usually improves the conditions. Value‑increasing investments can raise the lending value but must be recognized by the bank. Because methods and limits vary by institution, it is worthwhile to compare offers and, if needed, consult an independent mortgage expert or broker. They can put valuation, lending ratio and affordability into a market‑wide context and help choose a suitable interest and amortization strategy.