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A significant development has been taking place on the Swiss mortgage market since October 2023: fixed-rate mortgages with terms of three and five years now offer more favourable interest rates than Saron mortgages. This change, last observed at the end of 2021, continued in November for ten-year mortgages. A recent survey of mortgage providers also reveals a stable forecast for the Swiss National Bank's key interest rate.
At the beginning of October 2023, a remarkable shift began in the mortgage market. The benchmark rates for three- and five-year fixed-rate mortgages fell below the Saron rate. Ten-year mortgages followed suit in early November, with the average rate for these falling from 3.11% in June to 2.39% in December.
Stability for Saron mortgages
The Saron mortgage, which has remained stable since the Swiss National Bank (SNB) decided to leave the key interest rate at 1.75% in September, is currently at 2.63%.
Results of the mortgage provider survey
A survey of 50 mortgage providers revealed that over 90% expect the SNB to leave the key interest rate unchanged on 14 December 2023. Providers forecast stable interest rates for shorter terms of up to five years, while longer terms are expected to see more volatility and a downward trend in interest rates. The biggest concerns of those surveyed are inflation, a possible recession and the economic situation in Europe.
Recommendations for mortgage holders
- Switching to fixed-rate mortgages may be worthwhile at present, as they are more favourable than Saron mortgages.
- Long-term fixed-rate mortgages are still recommended for customers looking for planning and budget security.
- If flexibility is required, variable-rate mortgages or a combination of Saron and fixed-rate mortgages could make sense.
- Comprehensive advice that takes various financial aspects into account is essential for a sustainable financing decision.
Conclusion: These developments in the Swiss mortgage market emphasise the need for careful and informed decision-making for mortgage borrowers, especially in a rapidly changing interest rate environment.