Mortgage Agreement Form for Switzerland

Mortgage Agreement Form Template for Switzerland

A Swiss mortgage agreement form is a legally binding document governed by Swiss federal and cantonal laws, particularly the Swiss Civil Code (ZGB) and Code of Obligations (OR). This document establishes the terms and conditions under which a lender provides financing secured against real property in Switzerland. It details the loan amount, interest rates, repayment terms, security arrangements, and obligations of all parties involved. The agreement must comply with strict Swiss banking regulations and FINMA guidelines, including specific requirements for loan-to-value ratios, amortization schedules, and risk assessment protocols. The document incorporates provisions for property registration in the Swiss land registry system and accounts for both federal and cantonal requirements.

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What is a Mortgage Agreement Form?

The Mortgage Agreement Form serves as the primary legal instrument for securing property financing in Switzerland, governed by Swiss federal and cantonal laws. This document is essential when individuals or entities seek to obtain financing secured against real estate in Switzerland, whether for residential, commercial, or investment purposes. The agreement comprehensively outlines the rights and obligations of both lender and borrower, including specific provisions required under Swiss law such as mortgage ranking, property registration requirements, and compliance with FINMA guidelines. It incorporates mandatory elements from the Swiss Civil Code and Banking Act, while also accommodating cantonal variations in property law. The mortgage agreement form is particularly crucial in Switzerland's unique property financing landscape, where mortgage lending often extends beyond typical residential terms and may include features such as intergenerational mortgages or pension-linked financing structures.

What sections should be included in a Mortgage Agreement Form?

1. Parties: Identification of the lender (typically a bank or financial institution) and the borrower(s), including full legal names, addresses, and any registration numbers

2. Background: Context of the mortgage agreement, including the property purchase and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

4. Property Details: Complete description of the mortgaged property, including address, land registry details, and property identification numbers

5. Loan Amount and Purpose: Specification of the mortgage amount, currency, and intended use of the funds

6. Interest Rate and Calculations: Details of the interest rate (fixed or variable), calculation method, and adjustment mechanisms

7. Repayment Terms: Schedule and methods of repayment, including amortization requirements and payment dates

8. Security and Mortgage Rank: Details of the mortgage security, including ranking of the mortgage and any other securities

9. Borrower's Representations and Warranties: Declarations by the borrower regarding their financial status, property ownership, and other relevant matters

10. Borrower's Obligations: Ongoing obligations including property maintenance, insurance, and compliance with regulations

11. Events of Default: Circumstances constituting default and the lender's rights in such cases

12. Lender's Rights and Remedies: Rights of the lender in various scenarios, including default

13. Fees and Costs: All fees, charges, and costs associated with the mortgage

14. Notices: Communication requirements and methods between parties

15. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction

What sections are optional to include in a Mortgage Agreement Form?

1. Co-Borrower Provisions: Additional terms when there are multiple borrowers - used when the mortgage involves more than one borrower

2. Construction Provisions: Specific terms for construction mortgages - used when the property is yet to be built or undergoing major renovation

3. Commercial Use Provisions: Additional terms for properties used commercially - used when the property is not purely residential

4. Cross-Default Provisions: Terms relating to other loans or obligations - used when the borrower has multiple facilities with the lender

5. Foreign Currency Provisions: Special terms for mortgages in foreign currencies - used when the mortgage is not in Swiss Francs

6. Rental Income Provisions: Terms regarding rental income and assignment - used for investment properties

7. Environmental Provisions: Additional terms regarding environmental risks - used for properties with potential environmental concerns

What schedules should be included in a Mortgage Agreement Form?

1. Property Description Schedule: Detailed technical description of the property, including exact measurements, boundaries, and land registry excerpts

2. Payment Schedule: Detailed amortization table showing payment dates, amounts, and interest calculations

3. Insurance Requirements: Detailed list of required insurance coverage and minimum amounts

4. Property Valuation Report: Official property valuation report from approved valuers

5. Fee Schedule: Detailed breakdown of all applicable fees and charges

6. Required Documents: List of all documents required from the borrower, including timing requirements

7. Building Insurance Certificate: Copy of the building insurance certificate and coverage details

8. Land Registry Extract: Official extract from the land registry (Grundbuch/Registre foncier)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Real Estate

Legal Services

Insurance

Construction & Development

Property Management

Financial Technology

Wealth Management

Public Sector

Relevant Teams

Legal

Mortgage Operations

Risk & Compliance

Real Estate Finance

Credit Assessment

Document Management

Client Advisory

Property Services

Regulatory Affairs

Banking Operations

Underwriting

Quality Assurance

Relevant Roles

Mortgage Advisor

Legal Counsel

Banking Relationship Manager

Credit Risk Officer

Property Valuation Specialist

Compliance Officer

Real Estate Manager

Financial Controller

Notary Public

Banking Operations Manager

Mortgage Underwriter

Property Lawyer

Document Specialist

Risk Assessment Officer

Client Advisory Officer

Industries
Swiss Civil Code (ZGB) - Articles 793-883: Core provisions governing mortgage rights (hypoth��que/Hypothek), property registration, and real estate liens. These articles define the fundamental rules for creating and enforcing mortgage rights in Switzerland.
Swiss Code of Obligations (OR) - Articles 312-318: Regulates the contractual aspects of loan agreements, including mortgage loans, defining the rights and obligations of both lender and borrower.
Federal Act on Banks and Savings Banks (Banking Act): Contains regulations on mortgage lending by banks, including requirements for loan-to-value ratios and risk assessment guidelines.
FINMA Guidelines on Mortgage Lending: Regulatory guidelines issued by the Swiss Financial Market Supervisory Authority specifying requirements for mortgage lending, including minimum down payments and amortization rules.
Federal Act on Consumer Credit (KKG): While mortgages are generally excluded, certain consumer protection aspects may apply when the property is primarily for personal use.
Federal Act on Debt Enforcement and Bankruptcy (SchKG): Relevant for enforcement procedures and creditor rights in case of default on mortgage payments.
Cantonal Property and Land Registry Regulations: Local regulations governing property registration and transfer, which vary by canton and must be considered in mortgage agreements.
Swiss Money Laundering Act (GwG): Relevant for verification of funds' origin and due diligence requirements in real estate transactions and mortgage lending.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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