• Patrick Schmucki, Director |
  • Ulrich Prien, |

Real estate accounts for around 40% of energy consumption in Switzerland. The guidelines clarify how sustainability considerations should be incorporated into the consultation in order to help achieve climate goals. Offering new financing options is likely to be key to success.

The Swiss Bankers Association (SBA) issued new guidelines for real estate financing. The guidelines have been published against the backdrop of the financial center's efforts to position itself internationally as a sustainable finance center and make a positive contribution to the Federal Council's climate goals. In a European context, the guidelines share certain similarities with the European Banking Authority’s Guidelines on loan origination and monitoring (sections 4.3.5 and 4.3.6), which entered into effect on 30 June 2021.


The SBA's new guidelines relate to the provision of advisory services to private individuals by mortgage providers in regard to the financing of owner-occupied real estate. The SBA guidelines enter into effect on 1 January 2023 and must be complied by SBA members. They will be granted a one-year transition period to implement the guidelines, which will end on 1 January 2024. The guidelines apply to both new and existing financing.

Guideline content

The SBA guidelines set out some mandatory content that must be discussed with customers during the consultation:

  • Assessment of the foreseeable need for renovations in order to motivate owners to plan and undertake measures to preserve their property's value and ensure its energy efficiency in the long term.
  • The owners should be told about the financing options available to them for implementing renovation measures. In this context, explicit reference should also be made to available public and private funding measures. The SBA’s FAQs explicitly mention Energiefranken, Energieschweiz, cantonal building programs, GEAK and Minergie.
  • Information on independent experts and specialist agencies offering specific advice in connection with preservation of value and energy efficiency.
  • The providers must ensure that its customer advisors undergo adequate and regular training.

Practical challenges

Based on this content, the following challenges could potentially arise in real estate financing consulting:

  • Training: Most client advisors are unlikely to be familiar with the finer details of energy efficiency issues and the impact of climate change on housing prices. Banks will therefore need to decide whether they wish to build up this knowledge internally or enlist the help of an external partner. It will also be crucial for banks to be able to independently show their customers the trade-offs, advantages and disadvantages of more sustainable construction.
  • Impact on the lending process: Banks that have committed to a "net zero target" may be inclined to refrain from financing certain properties or to make the conditions of such financing more costly. However, measures of this nature do not go far enough. Alternative financing options such as transformation loans or the financing of specific sustainability solutions can contribute to an effective reduction of CO2. In the mortgage business, the assumption of certification costs or additional energy consulting, for instance, could be a possibility as well as being profitable for both sides.
  • Existing mortgages: A recent study has shown that the greatest potential for positive change in the mortgage market is clearly to be found in existing financing, as the majority of new-builds meet high sustainability standards as a matter of course. Implementation in cases of existing financing is likely to be a complex undertaking, as the information on the condition of the properties with respect to energy efficiency often still has to be obtained internally.

What should providers do now?

The directive is an opportunity to strengthen the role played by banks in the mortgage business. In a market where intermediaries and platforms are growing in importance, this is an opportunity for banks to position themselves as a reliable, proactive partner for home financing and further stake their claim to that all-important direct interface with the customer.

Three aspects will be critical to success:

  1. Institutions should decide which goal they intend to pursue in implementing the directive as well as determine what impact this will have on the loan approval process and whether this will require new forms of financing.
  2. Where there is existing financing, the data on the properties should be reviewed and updated to allow the need for action to be more readily assessed.
  3. Customer advisors must be given sufficient training to provide customers with high-quality advice. In certain cases, it may make sense to establish partnerships with specialist third-party providers to ensure access to the required expertise. 

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