The rate cuts decided by the Swiss National Bank (SNB) have relaxed the conditions for granting real estate loans, noted the online comparator Comparis. Rates on 10-year fixed mortgages have halved from 2022 highs.
In the third quarter, the average rates over ten years calculated by Comparis fell within the range 1.5%-2.0% for fixed mortgages and between 1.6% and 2.0% for loans based on the Saron, according to the periodic report published Thursday.
This relatively low level has generated strong demand, with 72% of those surveyed having taken out a property loan choosing a ten-year fixed rate mortgage, compared to 40 to 50% in the two previous quarters. The proportion of average maturities – four to six years – halved over three months, to 14%. Three-year mortgages, including Saron, have been reduced to the minimum, going to 7%, compared to 20% previously.
Despite the rate cuts decided by the BNS, fixed-rate mortgages remain less expensive than their Saron-based counterparts, but the negotiation margins have evolved. “The prospect envisaged by the markets of a further fall in interest rates has had a positive effect on the conditions of fixed mortgages since June, the rates of which have shown a clear decline,” notes Dirk Renkert, Money specialist at Comparis, cited in the press release.
Uninterrupted downward trend
The decline in indicative ten-year mortgage rates has been on a downward slope since June, without interruption in the trend. At the end of the third quarter, these amounted to 1.81%, down 0.33 percentage points compared to the end of June. For five-year rates, Comparis arrived at 1.68%, or 0.36 points less over three months. At the beginning of January, these two indicative rates reached 2.26% and 2.13% respectively.
The yield on ten-year Confederation bonds stood at 0.41% at the end of September, down 0.25 percentage points since the start of the year, indicates the online comparator.
The SNB cut its key rate by 0.25 percentage points in September, the third consecutive reduction of this magnitude, to 1%. The major central banks are also following the path of monetary easing, the American Federal Reserve (Fed) having “struck a big blow” by lowering its rate by 0.50 points and now targeting 4.75-5%, recalls the press release. . The European Central Bank (ECB) set its key rate at 3.5% after a reduction of 0.25 points.
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