The mortgage must fit the finances, the financing period and purpose, and the willingness to take risks.
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the essentials in brief
- Fixed-rate mortgage, variable-rate mortgage, and Libor mortgage are the three options.
- Budget and willingness to take risks determine the right mortgage model.
In order to find the right type of mortgage, you first need to analyze your own financial situation. To what extent can interest rate fluctuations be overcome? The answer to this question provides information about the right type of mortgage.
Finance: The three mortgage models
If you want to buy a property, you can choose between a fixed-rate mortgage, a variable mortgage model and a Libor mortgage.
While one type of mortgage requires more finance but protects against interest rate fluctuations, the other model is cheaper but less secure.
Fest mortgage
The fixed-rate mortgage is the most popular type of mortgage. Around 80 percent of all Swiss choose this variant. The term and the interest rate are firmly anchored.
The interest rate therefore remains unchanged over the entire period. This results in a high level of security and opportunities for careful budgeting.
Variable mortgage
The variable mortgage does not have a fixed term. The interest rate changes flexibly with the interest rate level, which makes the variable model particularly useful when interest rates are falling.
Variable-rate mortgages are ideal for short-term financing because property owners are flexible during this period. The contract can usually be terminated with a notice period of three or six months.
Libor mortgage
The Libor mortgage or money market mortgage is ideal for flexible interest rate movements. For a fee, investors can agree on a minimum interest rate or limit the interest rate swings upwards.
Mortgage types often combine sensibly
What the three types of mortgage have in common is that the interest rate and loan amount, i.e. the finances, are inextricably linked. The loan term, market interest rates and creditworthiness, i.e. the creditworthiness of the debtor, also have an influence on the interest rate.
It is important to carefully check which type of mortgage is suitable before buying a house or apartment. A combination of all three forms is often appropriate.
