Interest rate cuts in Switzerland: what borrowers need to know

Several weeks ago, interest rates for mortgages in Switzerland experienced a major recession. Indeed, the recent decision of the Swiss National Bank (BNS) to reduce its prime rate lead to a reduction in the cost of real estate loans.

In this economic context characterized by controlled inflation, the financing climate for real estate appears to be more favorable than ever. However, experts warn of rate stability that could limit profits for lenders in the future.

A reduction in rates that benefits borrowers

On June 20, the Swiss National Bank (SNB) reduced. base rate of 25 basis pointscarrying it at 1.25%. This decision had an immediate impact on the mortgage market, with a significant reduction in the interest rate index for residential properties, from 1.99% To 1.77%. For a mortgage of 800,000 francs, this represents a an annual saving of 1,760 francs in interest costs.

According to Florian Schubiger from Hypotheke.ch, this fall shows a low risk of an increase in the inflation in Switzerland. Mortgage rates current figures even include a continuation of the recession. In fact, because the rate curve is relatively flat, borrowers can benefit from lower rates for longer periods, such as five-year or ten-year fixed mortgages, compared to Saron mortgages.

The best offers on the market

Currently, five-year fixed-rate mortgages start at 1.46% on major comparison platforms, while ten-year deals are around 1.5%. It was the smallest stock share of Saron 1.77%, with a margin of 0.56 percentage pointsaccording to the main rate of the SNB.

For borrowers looking for more favorable conditions, banks are often more competitive, especially for Saron mortgages. In addition, insurance companies and pension funds, although they are late in their offers, are starting to return to the market with attractive proposals. There Geneva Cantonal Bank currently stands out with the best conditions for Saron mortgages and fixed rates.

Outlook for the coming months

Florian Schubiger thinks so mortgage rates That could decline slightly in the coming months, but the downside is now limited. Projections indicate that the SNB may continue to change its rates, but it is also possible to stabilize it. Therefore, lenders should consider taking out a mortgage at a fixed rate as a medium-term secure option.

In addition, it is essential for future owners and borrowers be alert for evolution of interest rate, especially by monitoring signs of a possible increase in international interest rates, which could affect the Swiss monetary policy.

In this context, it is recommended to compare offers from several suppliers and to negotiate actively to obtain the best conditions. Interest rates change, and some providers give discounts to their customers more quickly. It is therefore advisable to consult regularly with comparison platforms and find out about it current rates.