Should you buy
or invest?
Same starting capital: deployed into a buy-to-let property, or invested directly in equities? Net rental income is reinvested each month. Move the sliders, the result recalculates live.
Last updated: May 2026
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Buy or rent in Switzerland: the two mechanisms at play
In Switzerland, buying property is often presented as the investment of a lifetime. The reality is more nuanced. With prices exceeding CHF 10,000 per m² in major cities, the required down payment (minimum 20% of the purchase price, of which 10% must come from outside the 2nd pillar) ties up considerable capital. That same capital, invested in equities, would also have grown over time.
This simulator compares two uses of the same capital: real estate investment (purchase, letting) versus stock market investment. In the property scenario, the capital serves as the down payment; the mortgage is calculated on an interest-only basis. Net monthly rents (net rental yield × property price / 12) are fully reinvested in equities. When rents exceed mortgage interest, the surplus accumulates in stocks. In the stock scenario, the same capital is invested in one lump sum and grows at the chosen rate, with no monthly contributions.
Two variables tip the result: the annual appreciation of the property and equity market returns. In Switzerland, housing values have risen on average by 2 to 4% per year over the past 20 years according to IAZI. Global equity indices (MSCI World) have delivered an average annual return of 7 to 8% over the same period, dividends reinvested.
The simulator intentionally does not model the imputed rental value, maintenance costs (approximately 1% of the property value per year) or mandatory amortisation. These factors depend too much on personal circumstances to be generalised. They tend to slightly favour the equity scenario in major Swiss cities.
Sources: IAZI (Swiss property price index), MSCI World Total Return Index, SNB (mortgage rates).
Frequently asked questions
What is the minimum down payment required to buy in Switzerland?
In Switzerland, the minimum down payment is 20% of the property price. At least 10% must come from strict own funds (savings, inheritance, pillar 3a) and not from the 2nd pillar. For a property at CHF 900,000, this means CHF 180,000 down payment, of which CHF 90,000 must come from outside the pension fund.
What is the historical return of global equities?
The MSCI World (global equities) has delivered an average annual return of around 7 to 8% in CHF over the past 20 years, dividends reinvested. The SMI (Swiss Market Index) delivered 6 to 7% over the same period. These averages include strongly negative years (2002, 2008, 2022) and do not guarantee future performance.
How does a Swiss mortgage work?
The Swiss mortgage is split into two tranches. The 1st mortgage covers up to 66% of the property value and has no mandatory amortisation. The 2nd mortgage covers the tranche between 66% and 80% and must be amortised within 15 years or before retirement. The debt-to-income ratio (total charges / gross income) must not exceed 33%.
What is the imputed rental value (Eigenmietwert) in Switzerland?
The imputed rental value is a notional income added to your taxable income if you occupy your own home. It represents approximately 60 to 70% of the market rent. In return, mortgage interest and maintenance costs are deductible. This mechanism tends to reduce the tax advantage of ownership, especially after mortgage amortisation.
What additional costs should I budget for when buying?
Beyond mortgage interest, budget for: co-ownership charges and renovation fund (0.5 to 1% of property value per year), taxes on imputed rental value, building insurance, and mandatory amortisation of the 2nd mortgage. These costs often represent 1 to 2% of the property value per year and are not included in this simplified simulator.