– Fixed-rate mortgages now cheaper than Saron
Interest rates on fixed-rate mortgages have reached a new low. Experts see a variety of factors for what will happen in 2024.
Published today at 7:39 a.m. Updated 9 hours ago
The development of Saron mortgages is remarkable.
Bild: Christian Beutler/Keystone
Prices for fixed-rate mortgages continue to decline. Interest rates have been falling steadily since peaking in May. Fixed-rate mortgages are now even cheaper than a Saron mortgage. However, what happens next in 2024 depends on many factors.
While an average of 3.07% had to be paid for a two-year fixed-rate mortgage in mid-June, the interest rates are now only 2.26%, the online comparison service Moneyland calculated on Tuesday. There were also sharp declines in five- and ten-year mortgages, from 3.02 to 2.19 (five-year) and from 3.04 to 2.31% (ten-year), respectively. “This is a significant decline in mortgage interest rates for such a short period of time,” Felix Oeschger, an analyst at Moneyland, is quoted as saying.
Saron mortgage more expensive
The development is similarly remarkable in comparison to the Saron mortgages. At the end of October, for the first time in a long time, these were as expensive as fixed-rate mortgages. Now fixed-rate mortgages are ahead for the first time. Because average Saron mortgages have remained unchanged at 2.61% since October due to the key interest rate being maintained. This means that two-year fixed-rate mortgages are currently 0.35 percentage points cheaper, five-year fixed-rate mortgages are even 0.42 percentage points cheaper, and ten-year fixed-rate mortgages are 0.30 percentage points cheaper, according to Moneyland.
“But it shouldn’t be concluded from this that fixed-rate mortgages are now generally preferable,” said Oeschger. With a fixed-rate mortgage taken out today, the interest rate will remain constant over the entire term, whereas with a Saron mortgage it could decrease over the next few years.
SNB is likely to leave interest rates unchanged
According to a survey by Moneypark among around 50 mortgage providers, 90% of those surveyed expect unchanged interest rates of 1.75 percent for the key interest rate decision by the Swiss National Bank (SNB) due on Thursday, which would mean that Saron mortgages would remain at the current level. When it comes to fixed-rate mortgages, the survey participants assume that interest rates for shorter terms of up to five years will remain the same until the next interest rate decision in March. For longer terms, higher fluctuations and generally lower interest rates can be expected.
The comparison service Comparis makes a similar statement. For 2024, the experts expect medium and long-term mortgage interest rates to only move sideways with a slight downward trend. In the short term, Comparis does not expect any major changes for the time being. Specifically, Comparis expects five-year fixed-rate mortgages in a range of 1.80 to 2.25% by the end of 2024. Ten-year mortgages are likely to be between 2.00 and 2.40%.
Outlook with uncertainties
Overall, everyone emphasizes the many uncertainty factors for the further development of interest rates. For example, if, contrary to expectations, the economy weakens significantly, the SNB could be forced to lower key interest rates earlier, according to Moneyland. On the other hand, unexpected surges in inflation with a necessary tightening of monetary policy are also not impossible.
The monetary policy of the other central banks is also important. “I therefore tend to assume that the SNB will wait to cut interest rates until other central banks also reduce interest rates,” says Moneyland expert Oeschger. The Moneypark survey participants also continue to see the greatest uncertainty for interest rate developments in inflation, a possible recession and the general economic situation in Europe.
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2023-12-12 09:04:50
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