06.04.2021 – 00:30
comparis.ch AG
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Press release
Comparis Mortgage Barometer for the first quarter of 2021
Inflationary fears push mortgage rates to 12-month high
Fear of renewed inflation is supporting rising mortgage rates: in the first quarter of 2021, indicative 10-year mortgage rates hit their highest level in 12 months. This is indicated by the latest edition of the Comparis Mortgage Barometer. “There are many who believe that the end of the pandemic is near, which fuels the prospects for a recovery in the global economy – and is accompanied by a surge in capital interests,” says Frédéric Papp, Silver expert at Comparis.
Zurich, April 6, 2021 – At the start of the year, indicative 10-year mortgage rates were just over 1%. By the end of Q1 2021, they had risen to 1.20%. In this escalation emerges a peak at 1.21%. This is shown by data from HypoPlus, the mortgage service of the Comparis group. This is the highest value over the past twelve months. In the first quarter of last year, mortgage rates climbed to 1.19% in response to the shock of the coronavirus, but without exceeding this threshold. The rise in indicative mortgage rates over 5 and 2 years is less noticeable. At 0.92% and 0.86%, they are barely below Q1 2020 values.
“Many people believe that the end of the pandemic is near, which fuels the prospects for a recovery in the global economy,” explains Frédéric Papp, Silver expert at Comparis. But the coin has a flip side: Inflation fears are emerging and capital market rates are rising. “The rise in rates on the capital market increases the cost of refinancing mortgages,” continues the expert.
Lenders reduce their margins, to the benefit of mortgage takers
The increase in refinancing costs is reflected in the evolution of the 10-year swap rate, which has gained 35 basis points over the past three months to settle a little above 0%.
Mortgage institutions are passing the swap increase on to mortgage takers, but only in part. In other words, the price increase was contained, but the lenders’ margins melted. Data from HypoPlus, a mortgage service from the Comparis group, show that in the first quarter, the average indicative rate rose by only 16 basis points. The best rate negotiated by HypoPlus, on the other hand, only increased by 8 basis points. “This reduction in margins is a testament to the competition between service providers. The mortgage takers are the first beneficiaries, ”notes F. Papp.
There are 10-year fixed rate mortgages from 0.76%, HypoPlus figures to support. Compared to the indicative rate of 1.2%, the difference is 44 basis points. On the basis of a mortgage of 750,000 francs, the potential savings are around 3,300 francs per year, or 33,000 francs over the entire term of the mortgage.
The yield curve is straightening out
The interest rate differentials between short, medium and long maturities widened in the first quarter of 2021. The table below illustrates this state of affairs. “This is the consequence of a surge in inflationary fears,” explains F. Papp. At the end of March, the rate differential between a 10-year fixed mortgage and a 5-year fixed mortgage was established at 28 basis points. The rate of a 5-year fixed mortgage is 6 basis points higher than that of a 2-year fixed mortgage.
The indicative rates are average values. As a rule, the rate fixed by contract is significantly lower.
Pour plus d'informations : Frédéric Papp Expert Argent Téléphone: 044 360 34 30 E-mail: [email protected] comparis.ch
About comparis.ch
With more than 100 million visits per year, comparis.ch is one of the most visited websites in Switzerland. The company compares the prices and services of health funds, insurance companies, banks and telecom operators. It also presents the largest online offer in Switzerland for cars and real estate. With its detailed comparisons and in-depth analyzes, it contributes to more transparency in the market. comparis.ch thus strengthens consumers’ expertise in decision-making. A company founded in 1996 by economist Richard Eisler, comparis.ch now employs around 180 people in Zurich.
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