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A building loan is a flexible financing solution for the construction phase. You draw down the funds in stages as construction progresses and only pay interest on the amount you actually use. The interest rate is usually variable and slightly higher than for a mortgage. Once a construction phase is complete, the building loan is converted into a mortgage. 

A mortgage is a long-term, secured loan for your property – with either a fixed or variable interest rate. It’s suitable for financing your property long-term after the various construction phases have been completed.  

In a nutshell: the building loan gives you flexibility during the construction period – the mortgage provides long-term financing for your home.

Building loans and mortgages are earmarked for a specific purpose. This means that you may only use this money for your construction project. By processing the payments through us as the lender, we ensure that this condition is met. This procedure is common practice in Switzerland for construction financing.  

Your construction partners receive their money on time without you having to make each individual transfer yourself. You simply submit the invoices, and we take care of the rest. This means you benefit from less admin, greater security and a transparent overview of your construction costs and the progress of your project in Digital Banking at all times.

A building account is a special account through which all payments are processed during the construction phase. Your own funds and the building loan or mortgage are credited here. Invoices are paid directly to architects, construction companies and tradespeople from this account. You can access the building account at any time in your Digital Banking and thus view all the information about your construction project at a glance. Interest rate: depending on whether you take a loan or a mortgage

Consolidation refers to the conversion of a building loan into a mortgage. This conversion can also be carried out in stages – this is referred to as partial consolidation. In other words, you convert the building loan into a mortgage after each individual construction stage, allowing you to benefit from lower mortgage interest rates even before the construction phase is complete. 

The ideal solution depends on your individual needs, the construction phase and your risk tolerance. Whether it’s a building loan, a mortgage or a combination with staggered drawdowns, together we’ll find the right financing strategy for you. Make an appointment for a consultation and receive personalized advice at one of our branches or conveniently via video call.