Home ownership: how to finance your own home

Gross income determines the amount of the mortgage for an owner-occupied property. Affordability is when the annual costs incurred for the property do not exceed 33 percent of annual gross income. The costs consist of mortgage interest payments (at a hypothetical imputed rate of interest of 5 percent), amortization payments and incidental expenses (both are generally estimated at around 1 percent of the loan-to-value ratio or property value).

As mortgage interest rates rise, the running costs of owning a home are also increasing. From a purely financial perspective, over a ten-year term, a money market mortgage is currently still likely to be a more favorable financing option than a ten-year fixed-rate mortgage. But the choice of the optimal mortgage financing depends not only on current interest rate expectations, but also on the borrower’s risk capacity and risk appetite.

Find out hereClick here to go to the article “What should you do against rising rates? 3 action areas”. which three action areas you can consider when assessing your personal situation with regard to rising mortgage interest rates. In addition, our experts can help you with general financial planningClick here to go to the UBS Wealth Management page for general financial planning or with finding the right mortgageClick here to view UBS’s mortgage advisory services.