Goal
Maintain, improve, extend or prepare for letting?
Homeowner
Develop your property sensibly.
You already own a house or a flat. Now you might want to renovate, increase the mortgage, review a refinancing or buy another property.
Options
What you can make of your property
Renovate
Renew kitchen, bathroom, WC, roof, façade, windows or interior rooms. It is important to consider costs, benefits, tax consequences and financing together.
More on the Renovate tab →Mortgage increase
You take on additional money against the existing property. For this the bank reassesses value, income, burden and security.
No automatic commitment.Review refinancing
Take a fresh look at the existing mortgage: terms, interest rate model, amortisation, possible increase and risks of an early switch.
Especially important at maturity.Another property
The existing property may help to create equity for an investment property. However, the bank assesses both properties together.
Mind the risk to your home.Personal loan for renovation?
A personal loan seems quick and simple. But it is often more expensive than a mortgage and usually has to be repaid in fixed monthly instalments. These instalments also weigh on affordability later on.
Consider a mortgage increase?
A mortgage increase can be cheaper because the property serves as security. However, it is only possible if value, income, affordability, purpose and security fit.
Mortgage certificate and first rank explained simply
When a bank grants a mortgage, it wants security on the property. This security is arranged through the land register and the mortgage certificate. The rank shows who would be considered first in an emergency.
Order in the land register
1st rankstrongest security for the bankfirst
2nd rankfurther security after the first rankafter that
latersubordinated securitymore risk
Why does this matter?
If you increase the mortgage, the bank checks whether existing mortgage certificates are sufficient or whether an adjustment is needed. This can trigger notary and land register costs.
Put simply: besides the amount, it also matters how the mortgage is legally secured.
Mortgage increase: arithmetical headroom is not yet a commitment
A higher valuation can create headroom. Whether it can actually be used is only decided with income, affordability, purpose, mortgage certificates and the overall customer situation.
| Check step | Example | What it means |
|---|---|---|
| Current lending value | CHF 1’200’000 | Value the bank recognises today. |
| 80% orientation | CHF 960’000 | Arithmetical upper limit, not automatically available. |
| Existing mortgage | CHF 650’000 | Financing already drawn. |
| Theoretical difference | CHF 310’000 | Only usable if the new burden is affordable and the bank agrees. |
Basel III briefly explained: the rules mainly concern banks and their risk weighting. For owners it can mean that, for a mortgage increase, extension or investment properties, banks look more closely at risk, loan-to-value, documents and property type.
Renovate
Plan a renovation, conversion or extension properly.
A renovation is not just a building project. It affects budget, financing, taxes, documents and often also the value the bank works with.
Condition
Check roof, façade, windows, kitchen, bathroom, WC, pipes and damp.
Costs
Factor in quotes, planning, fees, reserve and possible extra costs.
Financing
Compare equity, a mortgage increase or interim financing.
Receipts
Split quotes and invoices cleanly and keep them.
Value-preserving
These works maintain the current condition or restore it. Examples: repairs, replacing existing components, roof repair, keeping the façade in good condition, renewing the bathroom or kitchen to a similar standard.
Put simply: the property stays in good condition.
Value-adding
These works create additional benefit, more space or a higher standard. Examples: converting the loft, creating a secondary flat, new usable space or a significant improvement in standard.
Put simply: the property becomes more usable or can be worth more.
Cost planning
Do not just plan tradesperson costs. Also think about planning, fees, permits, insurance, reserve and possible temporary solutions.
Mortgage for renovation
The bank checks whether the renovation is relevant to value, whether the higher burden remains affordable and whether security is sufficient.
Tax classification
Maintenance, value addition and energy measures should be kept as separate as possible on invoices. Cantonal rules can differ.
Choose financing to suit the project
Own funds
No new debt arises. At the same time, the liquidity reserve for the unexpected must not disappear entirely. With older buildings, additional items are particularly common.
Personal loan
Can be available quickly, but often costs more and is repaid in fixed instalments. This obligation reduces the free budget and can influence later bank reviews.
Mortgage or construction loan
An increase can be cheaper but requires lending value, affordability and sufficient security. For large conversions, the bank can pay invoices through a construction loan according to progress.
Make quotes comparable
A lump-sum item such as “kitchen and bathroom conversion” later helps neither the bank nor the tax specialist. Ask for a split by planning, demolition, labour, material, replacement of existing parts, new build-out, fees and reserve.
This way you spot price differences and can better document value-preserving as well as value-adding components.
Organise receipts from the start
Keep quotes, contracts, invoices, proof of payment, photos before and after the conversion, plans and permits together. For mixed works, note which part was repair and which part was improvement.
This documentation helps with financing, the tax return, insurance and a later sale.
Before the order
- Have the condition checked professionally
- Compare several quotes
- Clarify whether a permit is required
- Set a reserve for extra costs
Before financing
- Ask for the current lending value
- Calculate affordability after the conversion
- Have mortgage certificates checked
- Coordinate the payment plan
During the project
- Confirm changes in writing
- Check additional items on an ongoing basis
- Separate invoices by service
- Document handover and defects
Note: VEEDU does not say that a mortgage increase is always better than a personal loan. The point is to understand both options and to review the long-term burden.
Taxes
Understand taxes
Property taxes explained clearly.
Imputed rental value with the reform from 2029, debt interest, maintenance, rental income and property gains tax – explained for orientation, not tax advice.
What options does your property have?
Describe your plan. Together we structure the next sensible clarifications.