Finance
Swiss regulator warns mortgage risks are rising as banks stretch lending rules
Published by Global Banking and Finance Review
Posted on November 22, 2025
1 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 22, 2025
1 min readLast updated: January 20, 2026
FINMA warns of high risks in Swiss mortgage market as banks stretch lending criteria amid rising property prices, risking a market correction.
By Olivia Le Poidevin
GENEVA (Reuters) -Switzerland's financial market regulator warned on Saturday of growing risks in the housing market, saying banks were stretching mortgage lending criteria as property prices continue to climb.
"The risk in the mortgage market is high, prices continue to rise, and the danger of a correction is correspondingly high," the head of FINMA, Stefan Walter, told the Swiss news outlet Blick in an interview.
"We have found that the scope for granting mortgages is being exploited excessively by various banks."
Internal criteria are either too loose, or a high proportion of financing goes beyond some banks' own affordability rules, he stated.
He told Blick that some banks were relaxing their internal lending criteria on between 25% and 40% of mortgage loans as a result of intense competition.
FINMA intervenes when it sees exceptions of that level, he added.
(Reporting by Olivia Le Poidevin; Editing by Kevin Liffey)
A mortgage is a loan specifically used to purchase real estate, where the property serves as collateral. Borrowers repay the loan over time, typically through monthly payments that include interest.
Financial stability refers to a condition where the financial system operates effectively, allowing for the smooth functioning of financial markets and institutions, minimizing the risk of economic crises.
Risk management in banking involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability of unfortunate events.
Lending criteria are the guidelines that lenders use to determine whether to approve a loan application. These criteria assess the borrower's creditworthiness, income, and ability to repay the loan.
The housing market refers to the supply and demand for residential properties, including buying, selling, and renting homes. It is influenced by factors like interest rates, economic conditions, and demographic trends.
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