The loss of CS weakens competition on the Swiss mortgage market. However, those who compare have the chance of getting very attractive interest rates.
Anyone who compares the conditions on the mortgage market when financing real estate can save a lot.
Steffen Schmidt / Keystone
The takeover of Credit Suisse (CS) by UBS is also leaving its mark on the Swiss mortgage market. According to observers, the “new UBS” is parting ways with mortgage customers who do not meet certain solvency requirements. Over the weekend, the “Sonntags-Zeitung” newspaper reported that banks across the market were expanding their margins at the expense of mortgage customers. Interest rates for fixed-rate mortgages have therefore not fallen as much as they should have.
But that’s no big deal in a market where dozens of providers are vying for the favor of property buyers. After all, Switzerland has one of the highest bank densities in the world, with more than 200 banks. There is strong competition in the Swiss mortgage market, which, according to a study by mortgage broker Moneypark, has grown by more than a third to 1,239 billion francs in the past ten years.
The market leaders are the cantonal banks, which had a cumulative share of 37 percent of the Swiss mortgage market last year. UBS had a considerable market share of 23 percent, including the mortgage business of the acquired Credit Suisse, followed by the Raiffeisen banking group with 17 percent. The regional banks and savings banks had 8 percent. Many customers do not know that you can also take out mortgages with various insurance companies and pension funds. Their market shares in 2023 were 3 and 2 percent respectively.
There is definitely no oligopoly in the Swiss mortgage market that keeps mortgage interest rates artificially high. At the same time, however, the market is saying that the loss of Credit Suisse has weakened competition – this effect is apparently currently being “digested”. In addition, many banks have grown easily and quickly in recent years, have high mortgage volumes and are no longer fighting for customers with the very best interest rates. They are only passing on the two interest rate cuts by the Swiss National Bank (SNB) with a delay – if at all.
Nevertheless, customers should first and foremost take a look at themselves. Ultimately, it is their own fault if they accept mortgage interest rates that are too high and make it so easy for the banks. Even today, many people take out a mortgage with their own bank too quickly without considering alternatives – either out of ignorance or laziness. On the other hand, those who compare the terms and conditions of different providers, obtain offers and use mortgage platforms have the chance of getting very attractive mortgage interest rates. In the long term, such a comparison can make a difference of several tens of thousands of francs.
There are also providers who make comparisons for customers. However, according to a study by the Lucerne University of Applied Sciences and Arts in 2022, such mortgage brokers only had a market share of around 3.5 percent in Switzerland, while in Germany it was 30 to 40 percent. Online mortgages are also still only a niche in this country. The growth dynamics of the online brokerage platforms had also slowed in the years before the study published in autumn 2023, the university reports.
The behavior of mortgage customers in Switzerland seems to be changing only slowly. Many finance their property from the banker around the corner or from the financial institution that sponsors the local football club – without comparing the terms. There is nothing wrong with that. It even has something of a perfect world in which people know each other and support each other. But you shouldn’t complain about “too high” mortgage interest rates at the same time.
