immo!nvest – Die Plattform für Standorte und Immobilien

Tag: Saron-Hypotheken

  • Changes in the Swiss mortgage market after key interest rate cut

    Changes in the Swiss mortgage market after key interest rate cut

    Following the surprising reduction in the key interest rate by the Swiss National Bank(SNB), mortgages based on the Swiss Average Rate Overnight (SARON) reference interest rate have become more favourable, while interest rates for fixed-rate mortgages have remained virtually unchanged. However, demand for SARON mortgages fell drastically year-on-year in the first quarter of 2024, Comparis reports in a press release on the comparison portal’s latest mortgage barometer. At Comparis mortgage partner HypoPlus, the share of SARON mortgages fell from around 25 per cent to around 3 per cent.

    At the same time, the share of fixed-rate mortgages with a medium term increased from around 20 per cent to around 33 per cent. At just under 50 per cent, the share of fixed-rate mortgages with a term of ten to 15 years was roughly the same as in the same quarter of the previous year. “In an environment of great uncertainty, fixed-rate mortgages with the longest possible term offer a high degree of planning security,” explains Comparis financial expert Dirk Renkert in the press release.

    According to Renkert, fixed-rate mortgages had already become more favourable by the end of 2023, as the market had assumed that key interest rates would be cut in 2024. With market interest rates of 1.7 to 1.8 per cent for ten-year fixed-rate mortgages, these continue to be more favourable than SARON mortgages. In order for SARON mortgages, which currently have interest rates of 2.1 to 2.3 per cent, to catch up with fixed-rate mortgages, “at least one, if not two, interest rate cuts” by the SNB will be necessary, says Renkert.

  • Fixed-rate mortgages overtake the former favourites

    Fixed-rate mortgages overtake the former favourites

    In Switzerland, there was a veritable run on variable Saron mortgages after the interest rate turnaround. However, the former favourites no longer seem as attractive as before.

    Interest rates for Swiss fixed-rate mortgages have been on a downward trajectory since mid-June 2023. According to the mortgage index of the Swiss online comparison service Moneyland, ten-year fixed-rate mortgages are currently quoted at 2.31 per cent – the lowest level since May 2022.

    The downward trend intensified after the Swiss National Bank (SNB) surprisingly announced a pause in interest rates in September. As a result, fixed-rate mortgages are no longer more expensive than variable-rate Saron mortgages, which previously accounted for a large proportion of new business, for the first time since October last year.

    Today, fixed-rate mortgages are significantly cheaper than Saron mortgages for all maturities. Two-year fixed-rate mortgages are currently 0.35 percentage points, five-year mortgages 0.42 percentage points and ten-year mortgages 0.30 percentage points cheaper than their variable-rate counterparts.

    Experts agree that interest rates in Switzerland appear to have peaked. The majority of market observers assume that the SNB will leave key interest rates unchanged at the next meeting and in the first quarter of 2024 and could only announce interest rate cuts in mid-2024.

    The property specialists at Moneypark also reported that over 90 per cent of mortgage providers surveyed in Switzerland expect the SNB to leave the key interest rate unchanged at 1.75 per cent at its next meeting. Over the next three months, interest rates are likely to remain stable for shorter terms of up to five years, while longer terms are expected to see more volatility and a trend towards lower interest rates.