Your fixed-rate mortgage term is ending, but your financial situation looks nothing like when you signed. One income has vanished, maybe for childcare, maybe through job loss, maybe by choice. The bank’s 33% affordability rule (Tragbarkeit) now seems impossible to meet with a single salary. Will they foreclose? The answer depends on a factor most Swiss homeowners never think about until it’s too late: your loan-to-value ratio and which bank you chose.
The Myth of Automatic Renewal
Many couples in Switzerland buy property based on two solid incomes, then face a predictable life change: a baby arrives, and one parent, overwhelmingly the mother, steps back from full-time work. The mortgage payments keep flowing, but when the fixed term ends, the bank suddenly asks for fresh income documentation. This is where the system gets messy.
According to industry insights, Swiss banks do not automatically re-evaluate affordability at renewal. One mortgage specialist confirms that at the banks they worked for, “as long as you paid your interest on time, we never checked again, except if there was a reason to.” The catch? “Reason to” can be buried in your original mortgage contract.
The Hidden Review Date in Your Contract
Here’s what your mortgage advisor might not have emphasized: most Swiss mortgages include a predetermined “review date” for Tragbarkeit, completely separate from your interest rate fixation. This date can fall anywhere from 3 to 20 years after origination, depending on the bank’s risk assessment. If your initial affordability was borderline, that review might be scheduled for year 5, even if your fixed rate runs for 10 years.
If the review date aligns with your renewal window, the bank will scrutinize your current income. If it doesn’t, you might skate through. This arbitrary timing explains why some couples renew without a hitch while others face demands for early principal repayment.
Why Your LTV Ratio Is Your Only Real Protection
The research reveals a critical hierarchy: banks care far more about loan-to-value (LTV) than income consistency. With an LTV above 80%, the 33% affordability rule becomes non-negotiable for regulatory reasons. But drop below 65% LTV, and suddenly “the bank is certainly more flexible.” Large institutions like UBS maintain rigid policies, while local banks and Raiffeisen branches often exercise discretion.
This creates a perverse incentive: the more equity you’ve built, the less the bank cares about your income drop. A couple with 40% equity might renew at a single salary without issues. A family who bought recently with 10% down could face forced early amortization or even non-renewal, despite perfect payment history.
The Maternity Leave Trap
The connection between income drop and mortgage stress disproportionately affects women. Swiss employment law provides strong protections during Mutterschaftsurlaub (maternity leave), 16 weeks of job protection, anti-discrimination rules, and the right to return. But these shields end at the bank’s doorstep.
A Paris court recently ordered Credit Suisse to pay CHF 855,000 for discriminating against a pregnant employee by rescinding a promotion. While Swiss law similarly prohibits pregnancy-based discrimination, this doesn’t extend to lending decisions. A bank can legally refuse renewal if maternity leave triggered an income drop that breaks affordability metrics, even if the reduction is temporary and legally protected.
What Banks Actually Do When You Fail the Check
If your income no longer supports the mortgage under the 33% rule, banks don’t immediately foreclose. Their first move is typically demanding you pay down principal to improve the LTV ratio. For a CHF 800,000 mortgage on a CHF 1 million property, bringing the loan down to CHF 650,000 could flip you from “non-compliant” to “acceptable.”
But what if you lack the capital? Options narrow. Some banks might offer a shorter fixation period with a promise to re-evaluate later. Others could decline renewal entirely, forcing you to sell or seek alternative financing, often at worse terms. Local banks may show flexibility that UBS or Credit Suisse won’t.
Strategic Moves Before the Income Drop
If you’re planning a career break or expecting a baby, timing matters:
- Fix longer initially. A 10-year rate locks in your terms through the critical early childcare years. By the time renewal arrives, you may have returned to work or built significant equity.
- Pre-pay aggressively. Use dual-income years to push your LTV below 65% before the drop. This gives you maximum negotiating power later.
- Choose your bank wisely. Large banks offer competitive rates but little wiggle room. A regional bank or PostFinance might cost 0.1% more annually but could save your home when life changes.
- Document everything. If maternity leave caused the income gap, show the bank your return-to-work contract. Some lenders will average your income over several years or accept future earning projections.
The Unspoken Gender Dimension
This issue rarely appears in financial advice columns, but the data is clear: women bear the brunt of mortgage renewal risk. When couples decide one parent should reduce hours for childcare, the mother’s income typically drops. Swiss gender pay gaps mean her salary is often the “secondary” income on the application, making the household appear more vulnerable.
The Credit Suisse discrimination case highlights how pregnancy can derail careers. Even with legal protections, the financial timing of maternity leave can trap families in a mortgage renewal crisis through no fault of their own.
Real-World Scenarios from Swiss Homeowners
One couple bought a Zurich apartment in 2020 based on two tech salaries. When their daughter arrived in 2022, the mother shifted to 40% work. Their LTV was 78% at purchase. At renewal in 2025, their bank, UBS, initially refused the 33% calculation. They had to inject CHF 50,000 from savings to bring the LTV to 68% and secure a new 5-year term.
Another family in Bern faced the same income drop but had chosen a local Raiffeisen bank. With an LTV of 71%, the bank waived the strict affordability check due to their 15-year perfect payment record and the husband’s permanent contract. No extra capital required.
Actionable Steps If You’re Already in This Situation
- Calculate your current LTV using a recent property valuation. If below 65%, you’re in a strong position. If above 80%, start planning for capital injection.
- Contact your bank 12 months before renewal. Don’t wait for their letter. Propose solutions: partial repayment, longer fixation, or providing additional collateral.
- Shop around discreetly. Use a mortgage broker to test other banks’ appetite without triggering credit checks. Local banks and insurance companies (like Swiss Life) often have more flexible policies.
- Leverage legal protections. If the income drop resulted from maternity leave discrimination, document it. While banks aren’t bound by employment law, showing the reduction was involuntary and legally protected can influence their risk assessment.
- Consider alternative structures. Switching to a Libor or SARON mortgage might bypass rigid affordability checks, though it exposes you to rate volatility.
The Bottom Line
Swiss banks care more about your property’s equity than your family’s income stability. The 33% affordability rule bends for low LTV and breaks for high LTV. If you’re planning an income drop, aggressively pay down your Hypothek (mortgage) before it happens. If you’re already there, your bank’s size and your equity percentage will determine whether you keep your keys or get a moving notice.
The system punishes recent buyers and rewards established homeowners, a dynamic that makes starting families in expensive cities like Zurich and Geneva even harder. Until banks separate life-event income drops from credit risk, Swiss families will keep gambling their homes on timing and LTV ratios they barely understand.
