Published4. January 2024, 00:30
Interest rate peak reached?: Fixed-rate mortgages are more attractive than Saron mortgages for the first time
The hope of falling key interest rates is expressed, among other things, in falling capital market interest rates. This makes fixed-rate mortgages cheaper.
von1 / 3
When it comes to mortgages, there is a move away from flexible Saron offers.
20min/Marco Zangger
More people are now leaning toward fixed-rate mortgages because interest rates are lower.
20min/Taddeo Cerletti
Because the National Bank has no longer increased the key interest rate, the market is speculating that it will be lowered. This significantly reduces the financing costs of loans for banks.
20min/Matthias Spicher
Fixed-rate mortgages vs. Saron mortgages: That’s what it’s all about
-
Home buyers and owners who want a new mortgage need to think again.
-
You can now save money with fixed-rate mortgages.
-
There is also potential to save thousands of francs when negotiating.
The interest rate peak has probably been reached. The Swiss National Bank (SNB) contributed to this with its decision. It recently left the key interest rate unchanged twice because the inflation rate has clearly declined in recent months and is below the targeted two percent upper limit.
The market is now speculating on lower key interest rates and reducing capital market interest rates. This significantly reduces the financing costs of loans for banks. The yield on ten-year federal bonds, the so-called SNB spot interest rate, fell from 1.57 percent at the beginning of 2023 to just 0.66 percent in December 2023.
This is what falling capital market interest rates mean for mortgages
Home buyers and owners who take out a mortgage now have to think again. For the first time, fixed-rate mortgages are significantly more attractive than the flexible Saron mortgages, as financial expert Dirk Renkert from the comparison service Comparis says.
According to Comparis partner Hypoplus, the benchmark interest rates for ten-year fixed-rate mortgages were at 2.25 percent at the end of December, significantly lower than the three percent at the beginning of 2023. The benchmark interest rates for five-year fixed-rate mortgages also fell significantly to 2.13 percent, compared to 2.75 percent at the beginning of 2023.
However, the conditions for Saron mortgages were not cheaper, as the SNB key interest rate remained unchanged at 1.75 percent in December. Because higher rents, electricity prices and the VAT increase are driving inflation at the beginning of the new year, it is probably still too early for a lower key interest rate, according to Renkert. Many economists assume that this will not happen until the middle of the year at the earliest.
These mortgages are in demand now
The proportion of Saron mortgages in Hypoplus’s transactions has fallen significantly in the last three months. Many Saron mortgage borrowers are now switching to fixed-rate mortgages for cost reasons. While around a quarter of mortgage borrowers opted for a Saron mortgage in the first nine months of the year, in the last three months it was only around one in six.
In contrast, the share of four- and five-year fixed-rate mortgages increased significantly. Around one in five people decided to do this in the first nine months of the year. This proportion increased to around a third of all transactions in the last three months. The proportion of ten-year and longer-term fixed-rate mortgages remained almost unchanged at around 40 percent.
There is so much potential for savings when negotiating
The average interest rates calculated by Comparis for around 50 mortgage institutions are still negotiable. The best negotiated rate for a 10-year fixed mortgage was 1.68 percent on December 20, while the benchmark rate was 2.22 percent. Good affordability and loan-to-value are important for the negotiation.
Have you been following on Whatsapp for 20 minutes?
Stay informed and subscribe to the 20 Minutes WhatsApp channel: Then you will receive an update with our most moving stories directly to your cell phone in the morning and evening – hand-picked, informative and inspiring.
2024-01-04 01:13:39
#time #fixedrate #mortgages #attractive #Saron #mortgages
