The key interest rate cuts in Switzerland, the USA and the Eurozone have also caused interest rates for fixed-term mortgages to fall in recent months. The gap to Saron mortgages has narrowed.
The benchmark rates for fixed-term mortgages decreased during the third quarter. According to a market survey by the comparison platform Comparis, the benchmark rate for 10-year fixed-rate mortgages was 1.81 percent at the end of September. Compared to the value at the end of June of 2.14 percent, this is a decrease of 0.33 percentage points. The benchmark rate for 5-year fixed-rate mortgages fell by 0.36 percentage points from 2.04 percent to 1.68 percent over the same period.
Even though the interest rate difference between Saron mortgages and fixed-rate mortgages has narrowed again with the third interest rate cut in a row, fixed-rate mortgages are still slightly cheaper than Saron mortgages, it says in the am The mortgage barometer was published on Thursday.
(Grafik: Comparis)
“The market expectations of further falling interest rates have had a positive impact on the conditions of fixed-rate mortgages since June and in the following months, causing them to slip,” says Comparis financial expert Dirk Renkert. This has meant that, despite the SNB cutting interest rates again, the conditions for fixed-rate mortgages are still more favorable than for Saron mortgages.
After the interest rate cut, first-lien Saron mortgages cost around 1.6 to 2.0 percent on average. In contrast, 5-year fixed-rate mortgages are trading around 1.4 to 1.8 percent and 10-year fixed-rate mortgages are trading around 1.5 to 2.0 percent.
Given the existing uncertainties, many mortgage borrowers would rely on planning security. Long-term terms were in particularly high demand in the third quarter. “The conditions for 10-year fixed-rate mortgages have almost halved from their highs in October 2022,” says Renkert.
Proportion of 10-year-olds over 70 percent
According to data collected by Comparis partner HypoPlus, around 72 percent opted for a fixed-rate mortgage with a term of 10 years or longer in the last quarter. Previously this value was 40 to 50 percent. Accordingly, the proportion of medium terms (4 to 6 years) fell compared to the previous quarter to around 14 percent from around 30 percent previously.
Interest rates expected to continue falling
In addition to the geopolitical conflicts in the Middle East and Ukraine, economic threats are also seen as risk factors. Structural problems in Germany and the ongoing real estate crisis in China continue to weigh on consumer and business sentiment. Falling inflation due to falling crude oil prices and the strong Swiss franc have caused inflation expectations to fall. Looking ahead, further interest rate cuts are expected.
