Rent or Buy in Switzerland: What Actually Makes Sense in 2026?
March 17, 2026
5 min read
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Rent or Buy in Switzerland: What Actually Makes Sense in 2026?
The "rent or buy" question is never simple in Switzerland. High property prices, rising rents, and the abolition of the Eigenmietwert (imputed rental value) from ~2028 are fundamentally changing the equation. Our calculator compares the true costs — including taxes, affordability, and the question no bank will ask: What if you rent and invest the down payment instead?
Monthly Rent (gross)
CHF 1,000CHF 5,000
Purchase Price
CHF 400,000CHF 2,500,000
Equity (Down Payment)
10%50%
Minimum 20% required (of which max. 10% from Pillar 2)
Mortgage Rate
0.5%4.0%
Gross Household Income
CHF 80,000CHF 400,000
Marginal Tax Rate
15%40%
Eigenmietwert abolished
New tax law (expected from ~2028)
How the Rent vs. Buy Comparison Works in Switzerland
The comparison is far more than "rent per month versus mortgage payment." In Switzerland, unique factors make the calculation more complex than in most other countries: the Eigenmietwert (imputed rental value), strict bank affordability rules, tax-free capital gains on securities, and a property market where prices in many regions are out of reach for average earners.
The True Cost of Buying
- Mortgage interest — on a CHF 1M property at 1.5%: CHF 12,000/year.
- Maintenance & ancillary costs — rule of thumb: 1% of purchase price: CHF 10,000/year.
- Amortisation — 2nd mortgage from 80% to 65% LTV within 15 years: CHF 10,000/year.
- Eigenmietwert (until ~2028) — a fictional income of ~60–70% of market rent, taxed as income. Mortgage interest and maintenance can be deducted against it.
- Equity — minimum 20% of the purchase price. At CHF 1M: CHF 200,000 locked in the property.
The True Cost of Renting
Monthly rent including ancillary costs. No locked-up capital, no interest rate risk, no maintenance obligations. But no equity build-up either — unless you invest the difference.
The Eigenmietwert Abolition Changes Everything
On 28 September 2025, Swiss voters approved the abolition of the Eigenmietwert (imputed rental value), expected to take effect from the 2028 tax period. Homeowners will no longer declare imputed rental income — but in return, deductions for mortgage interest and maintenance costs will be eliminated.
Wüest Partner Study (March 2026): Buying is currently cheaper than renting in 57% of Swiss municipalities. After the Eigenmietwert abolition, this share is expected to rise to 71%. The effect is strongest in Western Switzerland (Jura, Neuchâtel, Fribourg, Valais). In Zurich, Zug, and Central Switzerland, renting often remains cheaper due to extremely high purchase prices relative to rent levels.
Our calculator includes a toggle that lets you switch between current and new tax law — so you can instantly see how the abolition changes your personal calculation.
Affordability: The Hurdle Where Many Fall
Before you fall in love with a property, check the affordability. Swiss banks use an imputed interest rate of 4.5–5% (not the actual market rate), plus 1% maintenance costs, plus amortisation. Total costs must not exceed one-third of gross household income.
| Purchase Price | Min. Income (approx.) | Equity Required (20%) |
|---|---|---|
| CHF 600,000 | CHF 108,000 | CHF 120,000 |
| CHF 800,000 | CHF 144,000 | CHF 160,000 |
| CHF 1,000,000 | CHF 180,000 | CHF 200,000 |
| CHF 1,500,000 | CHF 270,000 | CHF 300,000 |
Equity: at least 20%, of which at least 10% must be "hard" equity (cash, securities, Pillar 3a savings). A maximum of 10% can come from Pillar 2 (pension fund) — though this increases your pension gap.
The Question No Bank Asks: What If You Invest Instead?
Every bank adviser will show you that buying is "cheaper" than renting. What they won't show you: what happens if you invest the down payment instead?
With a CHF 1M property, you lock CHF 200,000 as equity. Invested at 6%, this grows to over CHF 640,000 over 20 years. That's the opportunity cost effect that our third calculator tab makes transparent.
The Swiss Advantage: Capital gains on securities are tax-free in Switzerland. CHF 200,000 growing to CHF 640,000 = CHF 440,000 in tax-free gains. In Germany, the US, or the UK, you'd pay 20–30% capital gains tax. This makes the "rent and invest" strategy particularly powerful in Switzerland. (→ Investing in Switzerland: Beginner's Guide)
Of course, a home is more than a financial decision. Security, the freedom to renovate, and the pride of ownership have real value that no calculator can capture. But the financial side should be examined with clear eyes — and that's what this tool is for.
Frequently Asked Questions: Rent or Buy Switzerland
Is it better to rent or buy in Switzerland in 2026?
In 57% of municipalities, buying is currently cheaper. After the Eigenmietwert abolition (~2028), this share is expected to rise to 71%. In Zurich, Zug, and Central Switzerland, renting often remains cheaper due to high purchase prices.
How do Swiss banks calculate mortgage affordability?
Imputed interest rate of 4.5–5% on the mortgage + 1% maintenance + amortisation of the 2nd mortgage to 65% within 15 years. Total must not exceed 33.3% of gross household income.
How much income do I need to buy a house in Switzerland?
For a CHF 1M property with 20% equity: approximately CHF 180,000 household income. For CHF 750,000: approximately CHF 135,000. Use the affordability calculator above for your specific situation.
What changes with the Eigenmietwert abolition?
From ~2028, no more imputed rental value as taxable income. But deductions for mortgage interest and maintenance are eliminated. For most homeowners, it's a net tax relief. First-time buyers get a limited mortgage interest deduction (max. CHF 10,000/year, decreasing over 10 years).
What are the opportunity costs of buying a home?
The return you give up because your capital is locked in property instead of being invested. CHF 200,000 at 6% = over CHF 640,000 after 20 years. Capital gains on securities are tax-free in Switzerland.
What counts as equity (down payment)?
At least 20% of the purchase price. Of this, 10% must be "hard" equity (cash, securities, Pillar 3a). Max. 10% from the pension fund (Pillar 2) — which increases your pension gap.
Is it worth renting and investing the money instead?
Historically, equity portfolios (~7% p.a.) have outperformed Swiss property appreciation (~1.5% p.a.). But homeownership enforces discipline. The answer depends on returns, the market, and your discipline.
Why do banks use 5% instead of the actual mortgage rate?
It's a stress test. A mortgage runs 20–30 years. In the 1990s, Swiss rates exceeded 7%. The imputed rate ensures affordability even in a high-rate environment.
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This calculator and article was created by Thierry Borgeat, Co-Founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.
Disclaimer: This calculator is for general informational purposes only and does not constitute personal investment, tax, or real estate advice. Calculations are based on simplified assumptions and reference values. Tax implications of the Eigenmietwert abolition are based on the Federal Act on the System Change in Owner-Occupied Housing Taxation (expected from tax period 2028). Past returns are not a guarantee of future results. Individual results may vary by canton, municipality, property, and personal circumstances. Capital gains on securities are tax-free for private investors in Switzerland — this may change. arvy is a FINMA-supervised asset manager.
Disclaimer: This calculator is for general informational purposes only and does not constitute personal investment, tax, or real estate advice. Calculations are based on simplified assumptions and reference values. Tax implications of the Eigenmietwert abolition are based on the Federal Act on the System Change in Owner-Occupied Housing Taxation (expected from tax period 2028). Past returns are not a guarantee of future results. Individual results may vary by canton, municipality, property, and personal circumstances. Capital gains on securities are tax-free for private investors in Switzerland — this may change. arvy is a FINMA-supervised asset manager.
