Building Your Own Home: Budget, Financing and Pitfalls
What to include in the budget, how construction loans work and why a reserve matters.
5 min read · Mortgage & Property
Life situations: Buying or renting home
Building offers freedom of design, but costs can rise during construction.
The budget
- Land, building costs and utility connections.
- Fees, permits, insurance and landscaping.
- A reserve of at least 10 % for surprises.
- Own funds from cash / savings / 3a securitiesCHF 120'000 · 13 %
- Own funds from pension fund (2nd pillar)CHF 60'000 · 7 %
- Mortgage neededCHF 720'000 · 80 %
Example with default values. Open the calculator →
Financing
Banks provide a construction loan that is paid out in stages and converted to a normal mortgage after completion. The same affordability rules as for buying apply, based on the full cost.
Avoid pitfalls
Use a fixed-price contract where possible, check the builder's references and keep an eye on the schedule, because delays cost interest. Check the affordability with the affordability calculator.
Try it yourself: Mortgage Affordability Calculator
Change any input and the result updates instantly. Nothing you enter is sent to a server.
- Mortgage needed
- CHF 720'000
- Equity (% of price)
- 20.00 %
- Hard equity (cash, min. 10 %)
- 13.33 %
- Calculatory yearly cost (5 % + 1 % + amortization)
- CHF 54'000
- Cost as % of gross income (max 33 %)
- 30.00 %
- Max cost at 33 %
- CHF 59'400
- Own funds from cash / savings / 3a securitiesCHF 120'000 · 13 %
- Own funds from pension fund (2nd pillar)CHF 60'000 · 7 %
- Mortgage neededCHF 720'000 · 80 %