Interest rate forecast for mortgages

Current economic outlook

Status as at: 19.06.2025
Editorial deadline: 19.06.2025

The Swiss economy started the year with momentum, and in fact saw slightly above-average growth in the first quarter. Growth was driven in particular by the export sector, which benefited from many US orders being brought forward in an effort to pre-empt new tariffs. At the same time, domestic demand remained stable. The recovery continued, in the construction sector in particular, no doubt partly due to the significant policy rate More information 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. cuts by the Swiss National Bank (SNB) over the past year and a half.

Since April 2025, however, the economy More information The economy refers to a country’s current economic situation and reflects changes and fluctuations in economic activity. Sooner or later, upturns are followed by downturns, which is known as an economic cycle. A strong economy means good economic performance and vice versa. has lost momentum. In the export sector, the pull-forward effect was followed by a significant reversal. At the same time, new US trade restrictions and a weaker global economy in general are clouding the outlook. The domestic economy More information The domestic economy refers to all economic activity within a country or economic area. It is an important indicator of how strongly an economy is growing in its own right, regardless of the global economy. is also showing initial signs of weakness. Consumers are worried about economic uncertainties, and the latest data indicates that this is gradually being reflected in their actual spending behaviour.

At the same time, inflationary More information 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. pressure has continued to ease. The strong franc and low energy prices are reducing import costs. Meanwhile, weaker economic performance is also reducing domestic inflationary pressure. Against this backdrop, the inflation rate actually fell slightly into negative territory recently, This means the SNB is likely to return to negative interest rates soon. 

Interest rate forecast for mortgages from PostFinance

The combination of an economic slowdown and low inflation is likely to further increase pressure on the Swiss National Bank (SNB) to ease monetary policy. We’re even expecting the policy rates to be lowered again when the next assessment is carried out on 25 September 2025. However, the effect on Saron mortgage financing costs is likely to remain limited, as these financing costs generally reach their lowest point at zero interest rates. We also expect medium and long-term fixed-rate mortgages to trend sideways. Given that Swiss capital market interest rates More information Capital market interest rates have a term of over one year. They play a decisive role in the cost of long-term financing. are already at a very low level, there is little scope for any further decline.

Development of mortgage rates in Switzerland

In 2022, interest rates on fixed-rate mortgages rose to just over 3 percent as a result of monetary policy measures to tackle high inflation. However, they have fallen sharply again following last year’s change in monetary policy. Since then, there has been another moderate increase, likely due in part to more cautious lending by banks. For the coming twelve months, we expect most fixed-rate mortgages to remain largely unchanged. For the 3-month SARON, by contrast, we expect a further decline on the back of another policy rate cut at the SNB’s next assessment.

A Saron or fixed-rate mortgage

The PostFinance fixed-rate mortgage attractiveness index is falling significantly, indicating that Saron mortgages are now more attractive than fixed-rate mortgages. This development is mainly due to the recent policy rate cut. As a result, Saron mortgages have again become less expensive and look set to remain at a low level. At the same time, we expect that the financing costs of medium and long-term fixed-rate mortgages are likely to trend sideways, given the limited scope for any further decline in capital market interest rates. This means that short-term money market financing More information Money market financing is available for a term of up to a year. is likely to remain more attractive than fixed-rate mortgages.

Interest rate forecast for download