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For a long time, Saron mortgages were cheaper than fixed-rate mortgages. That’s over for now. The most important answers.
What happened? For a long time, Saron mortgages with variable interest rates were cheaper because of the low interest rates and were the more popular financing option for your dream property compared to fixed-rate mortgages. Fixed-rate mortgages are now cheaper again for the first time in a long time.
Why is that important? Anyone who wants to buy a property is faced with the question of financing. The interest incurred can be determined in different ways: There is the fixed-interest mortgage or the so-called Saron mortgage. With the former you protect yourself from rising interest rates, but also do not benefit from interest rate reductions. With the latter, however, interest rate fluctuations in both directions are accepted. Saron mortgages are based on the National Bank’s key interest rate.
What do the numbers look like? According to the Comparis comparison service, the benchmark rate for fixed-rate mortgages with a term of three years was 2.08 percent as of December 20th, 2.10 percent for five years, 2.22 percent for 10 years and 2.32 percent for 15 years. The top interest rates determined by HypoPlus for the same date were even 0.4 to 0.5 percentage points lower. The Saron (Swiss Average Rate Over Night) remains unchanged at 1.70 percent. However, the banks’ interest margin also comes into play here, which, according to the comparison service Comparis, is around 0.6 to 0.7 percentage points. For a Saron mortgage you currently pay around 2.3 to 2.4 percent interest per year.
To the numbers
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The reference rates calculated by Comparis are published, but still negotiable, average interest rates from around 50 mortgage institutions.
How does the market react? In the last three months, the proportion of Saron mortgages in transactions with Comparis mortgage partner HypoPlus has fallen significantly. While around a quarter of mortgage borrowers opted for a Saron mortgage in the first nine months of the year, in the last three months it was only around one in six. In contrast, the share of 4- and 5-year fixed-rate mortgages increased significantly. Around one in five people opted for fixed-rate mortgages with medium terms in the first nine months of the year. This proportion increased to around a third of all transactions in the last three months. The proportion of ten-year and longer-term fixed-rate mortgages remained almost unchanged at around 40 percent.
What will further development look like? After a year of interest rate increases, the Swiss National Bank has left the key interest rate at the same level since June last year – the fight against inflation has been successful. The interest rate peak appears to have been reached. The chief economist at Raiffeisen Switzerland, Fredy Hasenmaile, also sees it this way: “Yes, the interest rate peak has been reached. The year 2024 will be the year of interest rate cuts. The capital markets have already strongly anticipated this. Interest rates on the capital markets have fallen and so have mortgages. And accordingly, fixed-rate mortgages are now usually cheaper than Saron mortgages.”
Legend: Three quarters of all mortgages granted in this country are fixed-rate mortgages – and the trend is rising: (Image: 10/05/04) KEYSTONE/Steffen Schmidt
If interest rates then actually fall, this would in turn have a positive effect on Saron mortgages. “I wouldn’t write off the special mortgage too early. We expect the first key interest rate cut in the second half of the year. This will already make the Saron mortgages cheaper and there should be further reductions next year.”