Swiss Regulator Further Restricts Mortgage Loan Requirements

The Swiss Financial Market Supervisory Authority (the "FINMA") announced on 28 August 2019 that it had recognised as minimum standard the amended Guideline of the Swiss Bankers' Association (the "SBA") on Minimum Requirements for Mortgage Financings of 27 August 2019 (the "Amended SBA MR Guideline"). The Amended SBA MR Guideline tightens up the rules applicable to the financing of investment properties. The maximum loan-to-value ("LTV") ratio is set at 75%; a higher LTV ratio remains permitted, but it requires higher capital cover. The amortisation to 66,6% of the lending value must be completed within 10 years. The amendments  do not affect owner-occupied residential properties. The other requirements of the prior version of the guideline remain applicable.