Financing a property bought at auction
At a property auction, financing must be in place before the day of the auction: the knock-down creates a binding obligation to buy, and a down payment is due immediately. Anyone who bids without a secured mortgage risks losing the security deposit and legal consequences.
Clarify the mortgage in advance, on a binding basis
Unlike a normal purchase, there is no financing condition after the knock-down. Before the auction, agree with your bank on a binding basis up to what amount and on what terms it will finance the purchase.
Equity and the down payment on the day of the auction
The auction terms usually require an immediate down payment (often by bank cheque or transfer). Plan for sufficient liquid equity – at least the 20 % customary in Switzerland plus the down payment set out in the terms.
Check affordability
Banks check affordability (rule of thumb: housing costs of no more than about one third of gross income, calculated with a higher notional interest rate). Make sure the property remains affordable even if interest rates rise.
Frequently asked questions
Do banks finance properties from forced sales?
Yes, many banks finance such properties, but they examine them closely. A binding financing commitment before the day of the auction is important, as you cannot withdraw after the knock-down because of missing financing.
How large is the down payment at the auction?
The amount is set by the office in the auction terms. Check them in advance and keep the corresponding amount available in liquid funds.
See current property auctions all over Switzerland – prepared every day from official publications.
View auctionsNote: This article provides general information and does not replace legal, tax or financial advice. The official publications and the auction terms of the competent debt enforcement or bankruptcy office are decisive.