Swiss mortgage interest rate forecast

Forecasting is a well-founded assessment, not a certainty. Whether now is the right time for you very much depends on your personal risk appetite, your financial situation and your individual needs.​

If interest rates are falling: if you expect interest rates to continue to fall, a Saron mortgage may be an attractive option to benefit from the cuts, depending on the interest rate level.​

If interest rates are rising: if you are expecting an interest rate rise or budget security is very important for you, it may be a good idea to fix the conditions over the long term with a fixed-rate mortgage.

Our specialists would be happy to help you find the right strategy.

The SNB policy rate can affect mortgage interest rates. This usually happens quickly with variable models such as the Saron mortgage, as these are based directly on short-term money market rates. Fixed-rate mortgages, however, are driven more by long-term capital market interest rates (swap rates) which to some extent already take into account anticipated future monetary policy and inflation. If a policy rate change is expected by the markets, its effect on fixed-rate mortgages could in many cases already be reflected in the interest rates beforehand.

Choosing the term is a strategic decision. Long terms (7–10 years or more) provide you with interest rate security over a long period of time, but are often slightly more expensive. Shorter terms (2–5 years) are usually cheaper, but require you to address the interest rate situation again sooner. Splitting is a popular strategy: you can split your mortgage into several tranches with different terms if required. This spreads the interest rate risk and avoids having to renew the total amount at once at potentially unfavourable conditions.

Our interest rate forecasts are produced by our economists on the basis of in-depth analyses of the global and national economic situation, inflation trends and the monetary policy of central banks. They represent a likely development. However, ongoing or unforeseen economic or political events can have an impact on interest rate developments at any time. Forecasts should therefore always be seen as a guide and not a guarantee.

Prices are mainly influenced by supply and demand. Low mortgage interest rates can generally boost demand for home ownership, as financing costs fall. This can lead to stable or rising real estate prices. Conversely, if interest rates rise sharply, this can dampen demand – but it doesn’t have to, especially if supply remains tight. Political decisions on mortgage lending can also influence demand for residential property and therefore property prices.

More information on the development of real estate prices

Yes, that is possible. With a forward mortgage, you can secure the current interest rates today – even if your existing mortgage is not set to expire for several months (e.g. in six, 12 or up to 18 months). Depending on the lead time, requested term and market situation, an interest rate premium (forward premium) may be incurred. In return you will be protected against any interest rate rises until your current mortgage expires. Please contact us for a non-binding quotation.

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