Swiss mortgage interest rate forecast

Just over three years ago, mortgage interest rates in Switzerland were still well above the current level and briefly exceeded the 3 percent mark. This was triggered by the more restrictive monetary policy pursued by the Swiss National Bank (SNB), which raised its policy rate  Policy rates are interest rates set by central banks and are key monetary policy instruments. Policy rates determine the interest rate at which commercial banks can borrow liquidity from central banks. As a result, most short-term interest rates in an economy fluctuate with policy rates. to 1.75 percent in the wake of high inflation  Inflation is the sustained rise in the general price level for goods and services in an economy over a particular period of time. When the price level rises, the purchasing power of money falls, i.e. fewer goods and services can be bought with the same amount of money as before. after the coronavirus pandemic. Inflation has now eased significantly. This means monetary policy has returned to a low interest rate environment. It has led to significantly lower mortgage interest rates, even though they have not fallen to the same extent since the end of 2024, despite further policy rate cuts. As we don’t currently expect any change in monetary policy, we anticipate that mortgage rates in Switzerland will generally move sideways over the coming 12 months. We also expect stable performance for the 3-month Saron. Accordingly, the SNB is likely to leave its policy rate unchanged in the next monetary policy assessment on 18 June 2026.

In percent

Single-family homes and condominiums

Prices for owner-occupied apartments rose sharply in the past quarter. By contrast, single-family home prices have barely changed compared with the previous quarter, after previously having recorded significantly higher growth rates. This may indicate that single-family homes have now reached such a high price level that owner-occupied apartments are considered a more affordable alternative for many buyers. Looking back over 2025 as a whole, residential property prices remain strong. Both owner-occupied apartments and single-family homes may have  benefited from the generally low capital market interest rates Capital market interest rates have a term of over one year. They play a decisive role in the cost of long-term financing.. As in the previous two quarters, the price trend for rental apartments was again only slightly positive. The fall in the reference interest rate  The mortgage reference interest rate is published quarterly by the Federal Office for Housing (FOH) and serves as the basis for rent adjustments in existing tenancies. The reference interest rate is adjusted in line with the development of the mortgage interest rate. It is based on the average mortgage interest rate offered by banks and is rounded to the nearest quarter percent. in September, which took effect in December, is likely to gradually have an impact on this.

Price index, January 2000 = 100

Interested in real estate as an investment opportunity? In our Investment compass under “Market overview”, you will find an analysis of the current situation on the Swiss real estate market.

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