No Swiss bank lends without security: to finance a property in Geneva, it requires a mortgage note. This title, registered in the land registry, gives the lender the right to force the sale of the property if the borrower stops paying. Understanding it also means knowing how to use it — because a well-managed mortgage note saves thousands of francs over the course of homeownership.
What a mortgage note is
A debt instrument secured by the property, created by notarial deed and registered in the land registry with the amount of the charge and, depending on the form, the name of the creditor. It embodies the bank’s right of pledge: in the event of default, the property answers for the debt. As long as the borrower pays, they remain fully the owner — the mortgage note is a security, not a transfer.
The mortgage note is the legal link in the mortgage: the loan is the contract, the mortgage note is the pledge that secures it.
The forms: paper or register
- The register mortgage note — electronic, registered directly in the land registry. It has been the majority form since 2012: impossible to lose, simplified transfers;
- the registered paper mortgage note — issued in the name of a specific creditor; any transfer requires formal registration, which makes it traceable;
- the bearer paper mortgage note — transferable without formality, more liquid but riskier; it has become rare.
What it costs, and who pays
Setting up the mortgage note requires a notarial deed, at the buyer’s expense: notary fees on a sliding scale — around 0.5% for a mortgage note up to 200’000 francs, around 0.25% for a mortgage note of several million — plus federal stamp duties, land registry registration and VAT.
Hence the golden rule when buying: ask to take over the seller’s existing mortgage note rather than creating a new one. On a property that is already mortgaged, the mortgage note survives the repayment of the seller’s loan — taking it over saves most of these costs.
The amount of the mortgage note: the real credit ceiling
The mortgage note carries a nominal amount, and the bank cannot lend beyond what its mortgage notes secure. If you want to borrow more — for renovation work, or because the property’s value has risen — you must either increase the existing mortgage note or create a second one: in both cases, a notarial deed is required. This is why it is worth thinking ahead when the note is set up: a mortgage note for an amount higher than the initial loan costs little more, and it saves a second visit to the notary years later.
The bank becomes its owner — and for exactly what
Here is the point that owners discover late, sometimes too late. Handing over a mortgage note to your bank is not “lending” it: under Swiss practice, it is transferred to the bank in fiduciary ownership for security purposes. The bank becomes the holder of the title, on condition that it uses it only to cover its claim.
Yet bank contracts almost always attach a general coverage clause to this transfer. Its scope deserves to be read word for word: the security covers not just the mortgage loan, but all the bank’s claims against you, present and future, arising from your business relationship. And the title is only returned once the bank no longer has any claim against you.
Translated into family or entrepreneurial life: the mortgage note on your house can secure your business operating credit, your Lombard loan or your company’s overdraft, at the same institution. Have you paid off your mortgage, but your company has an open credit line with the same bank? The title does not come back.
There is nothing improper in this — it is the price of Swiss mortgage rates. But it changes two concrete decisions. First, concentrating all your commitments in a single bank is not neutral: it ties the family home to risks that have nothing to do with property. Second, whether selling or repaying, ask in writing what the mortgage note still secures before counting on its return — the answer is not always what you expect.
And in the event of default?
This is when the mortgage note shows its full legal force: the creditor can initiate the forced realisation of the pledge — the sale of the property — to be repaid out of the proceeds. This is a rare scenario, preceded by recovery steps, but it is what explains the whole mechanism: the bank lends at low rates precisely because the property answers for the debt.
Once the loan is repaid: cancel or keep it?
Two options, and the lesser-known one is often the better one:
- Cancel the mortgage note in the land registry — the mortgage commitment officially ends; this is the option chosen by those who want a property free of any charge;
- keep it — an “empty” mortgage note remains reusable: to finance renovation work, a new purchase or a need for liquidity, it avoids paying for another notarial deed. It is also valuable on resale: a buyer who takes it over will be grateful for it.
In practice, in Geneva
The mortgage note comes into play at three moments: at purchase — check on our properties for sale and off-market listings whether a mortgage note exists and can be taken over; the question arises as soon as you view the property; at renewal — the amount of the mortgage note caps what you can re-borrow without going back to the notary; at resale — a retained mortgage note is an asset. Your borrowing capacity, meanwhile, can be tested in two minutes with the mortgage simulator, and every term on this page is defined in the glossary.