ZURICH (Reuters) - Switzerland’s financial market supervisor FINMA has recognized as a new minimum standard rules proposed by the banking industry governing mortgage lending for residential investment properties, it said on Wednesday.
The self-regulation standards set by the Swiss Bankers Association will require borrowers to provide a minimum down payment of at least a quarter of the loan-to-value ratio, up from 10% now, and will be applied by FINMA to the insurance industry as well. It will not affect owner-occupied residential properties.
“The revisions are moderate overall, but FINMA considers them to be a step in the right direction,” the Bern-based authority said in a statement. “FINMA has been drawing attention to the signs of overheating in residential investment property for some time.”
Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields