Roman (35) and Sarah Bucher (33) dream of owning their own home with a garden for their children (5 and 3 years of age). They have found their dream house and are now assessing whether or not they can afford a house which has a real-estate value of CHF 1,000,000.
Analyzing the Bucher family's equity
Together with their UBS client advisor, the Buchers analyze their equity. It amounts to CHF 250,000 and comprises:
Calculating the amount of borrowed capital which the Bucher family needs
The Bucher family would like to finance the purchase of their dream house, which has a real-estate value of CHF 1,000,000. They are putting down CHF 250,000 in equity. This means that they need CHF 750,000 in borrowed capital.
This complies with the maximum loan-to-value ratio of 80% borrowed capital.