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
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.