The rise in mortgage interest rates in the first quarter brought to mind a truism that was almost forgotten: interest rate lows don’t last forever. The upward trend came to a standstill in April and there are no signs that the Swiss National Bank will raise the key interest rate in the next two years.
However, some mortgage borrowers might worry about the time after that. What if the existing mortgage runs for another three to five years and the market interest rate will then be noticeably higher when it expires? Is it worth canceling the mortgage early and swapping it for a long-term mortgage – which is still cheap at the moment?
Get off in time?
Unfortunately, this is usually not the case. Because the lender wants to be compensated for the lost interest income: the so-called early repayment premium. It is calculated from the loan interest minus the interest income that the bank can achieve if it invests the mortgage amount that has become available in the remaining term.
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