Mortgage loan

A mortgage loan finances acquisition, construction or refinancing of real estate and is secured by rights over the property, commonly through mortgage notes or similar land-register security. In Switzerland, the loan contract governs interest type, amortisation, maturity, valuation, loan-to-value, covenants and default. The security instrument and its rank affect enforcement and refinancing. Borrowers must consider affordability, tax effects, early termination compensation and interest-rate risk. Banks are also subject to prudential, anti-money-laundering and collateral valuation requirements.