Many homeowners and those who want to become one in the near future are concerned about rising interest rates. The Saron mortgages in particular, which are directly affected by interest rate increases, are repeatedly described as “dangerous”. There is concern that the Saron mortgage (Saron stands for Swiss Average Rate Overnight) will soon be more expensive than a long-term fixed-rate mortgage and that it may then be too late to tie yourself cheap.
Just one more rate hike
But I can at least give you the all-clear from my point of view. At the moment it looks as if the Swiss National Bank (SNB) will lower the key interest rate just screw it up one more time, namely to 1.25 or 1.5%. The next step in 2024 should then be down again.
For the Saron mortgage, this means that even with a rather high margin of, say, 80 basis points and a key interest rate of 1.5%, it should not rise above 2.3%. Ten-year fixed-rate mortgages currently cost an average of 2.64%, three-year 2.39%. The risk that you will find yourself in a dangerous situation with a Saron mortgage is therefore low.
level is manageable
What does that mean for you now? If you have a Saron mortgage, you shouldn’t run nervously to your bank and tie everything up. Anyone taking out a new mortgage is faced with the common question of whether they want to deal with interest rates at all or whether they would rather sleep peacefully for ten years with a fixed-rate mortgage. On the other hand, I understand anyone who wants to save themselves the excitement and ties firmly. Even if a Saron mortgage is historically almost always cheaper.
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– Mortgages: everything will be fine
The concern that a Saron mortgage will soon be so expensive that it will become a problem is unfounded.