Assessment of financing, house or apartment

We have spoken with a large bank and the following applies:

- whoever earns in CHF must also take the loan in CHF
- interest rates are not that different, e.g. cross-border commuters can also have interest rates of 1.1 - 1.2%
- according to my information regarding salaries, the bank is willing to finance up to 800k

Hello,

I am a cross-border commuter myself and the bank's statement is nonsense if you want to build in Germany.

According to EU regulations, you can take a foreign currency loan in EUR. You bear the risk of the exchange rate, but your loan is in EUR. Almost all Sparkassen and Volksbanken on the German side near the border offer this.
Large banks shy away from this business and therefore do not offer EUR construction financing for cross-border commuters.

I myself have a EUR loan as a cross-border commuter with KFW 153. Interest rates are under 1% in combination.

Regards
Bawüch

The loan in CHF? Is your income currently in CHF or EUR?

And then when you change jobs? Do you have currency risk on your back

Cheers

From my own experience, I can also say that the banks in the border region have no problem at all with such constellations. They are even happy about the cross-border commuter customers, as the financing volume here is on average significantly higher than that of the "normal" German customer. Nevertheless, it must also be said that more distant or online banks like ING etc. do not do this and are therefore excluded.

Thank you for the answers.

My income is in CHF and my wife's income should also be in CHF in a few years. For this reason, I don't quite understand what disadvantages a loan in CHF has in Germany? Of course, the property is purchased in EUR, I practically have to exchange hundreds of thousands from the bank from CHF to EUR (at which rate, I don't know) but the installment will always be fixed.

It may be that later I need "less" CHF to pay the installment in EUR, but I think it is very difficult to judge what will happen in the future.

Or should I definitely look for a loan in EUR?

Thank you for the answers. My income is in CHF and my wife's income should also be in CHF in a few years. For this reason, I don't quite understand what disadvantages a loan in CHF has in Germany? Sure, the property is bought in EUR, I practically have to exchange hundreds of thousands from the bank from CHF to EUR (at what rate, I don't know) but the installment will always be fixed. It may be that later I need "less" CHF to pay the installment in EUR, but I think it is very difficult to judge what will happen in the future. Or should I definitely look for a loan in EUR?

The problem of the bank is that besides the real security (property) they would like to have personal access (e.g. wage garnishment). The legal possibilities abroad are always more difficult. That is why border-near banks are specialists here. The same applies to the future issue, currency risk of your salary. The bank must also assess this properly. What happens in case of a devaluation of the CHF? You have a loan in EUR and your CHF is worthless. You can no longer service the loan. This is more theory, but we have already experienced it all.

For this reason, I don't quite understand what disadvantages a loan in CHF has in Germany?

Exclusively the currency risk. Despite repayment, it can happen that the debt increases in EUR due to currency adjustments. We have already had serious issues with customers whose debt in EUR has increased significantly in recent years (not private individuals, but non-recourse financings of project companies – so without liability of a shareholder).