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Short term mortgage loan

If you want to take advantage of the lowest interest rates in the market and don't expect rates to rise anytime soon, then our short term mortgage loan is for you. It keeps the interest you pay to a minimum with a short term rate – especially attractive during periods of steady or declining interest rates. However, because interest rates can also go up, you'll need to keep a close eye on the financial markets.

Highlights

Attractive interest rates for the short term

The short term interest rate on this mortgage loan is designed to closely track market trends. The loan will renew automatically every three or six months unless you decide to switch to a different type of mortgage loan.

The flexibility you need

Our short term mortgage loan gives you the flexibility to keep interest payments to a minimum. At the end of each term, you’ll have the option of switching to a different type of mortgage loan if you think the short term rate will go up.

Minimize risk by combining interest rates

To reduce interest-rate risk, you can divide your mortgage loan into multiple tranches with different interest-rate conditions (fixed-rate, variable-rate, or Libor-linked). That can help protect you against higher interest rates when you renew your mortgage.

Mortgage repayment

You can pay down your mortgage either directly or indirectly.

Direct payment

With the direct repayment option, you make regular mortgage payments to BCV. These payments will be applied to the loan principal and interest, and your overall mortgage debt will decrease over time. However, your tax charge will increase every year since you can deduct only the interest payments.

Indirect payment

With the indirect repayment option, instead of making mortgage payments directly to BCV, you put the money into a third-pillar retirement account that you pledge to BCV. This option offers some tax advantages: you can deduct the payments made to your retirement account from your taxable income; and you maximize the amount of your tax-deductible mortgage debt.

Fees and conditions

Maximum amount of your loan that can be in the form of a short term loan: 50%
Minimum downpayment as a percentage of the purchase price: 20%
Maximum cost of mortgage and interest payments plus maintenance: 33% of household income
Minimum loan amount: CHF 100,000
Mortgage term: 3 or 6 months, renewed automatically for the same term.
Credit Fee Schedule (253.3 kB)

Information about LIBOR

LIBOR bows out

In July 2017, the Financial Conduct Authority, the UK market watchdog, announced that banks would no longer be required to participate in the setting of LIBOR after December 31, 2021, thereby putting an end to one of the most widely used indices of the last 30 years or more.

File size : 196 KB - Last update: 09.02.2023

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Useful documents

Buying a home in Switzerland

Owning your home is more than just an investment: it is a major decision that should be carefully considered.

File size : 1 MB - Last update: 12.02.2024

Related information

Libor mortgage

The short term mortgage loan closely follows financial market conditions during your chosen term.

Building Plus loan

Our Building Plus loan provides worry-free financing for the construction of your home – and you don't have to start paying it back until construction is complete.

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