The Swiss mortgage market is experiencing a boom in long-term fixed-rate mortgages thanks to falling key interest rates.
Long-term fixed-rate mortgages are currently in demand in Switzerland. – keystone
The conditions for fixed-rate mortgages have continued to improve significantly in Switzerland. With key interest rates continuing to fall, long-term fixed-rate mortgages in particular enjoyed high demand in the third quarter, according to the comparison portal Comparis.
Two weeks ago, the Swiss National Bank (SNB) cut the key interest rate by 25 basis points to 1.00 percent for the third time in a row and promised further interest rate cuts. Players on the mortgage market had been expecting interest rates to continue falling since June, which also led to falling mortgage interest rates, Comparis announced on Thursday.
Ten-year fixed-rate mortgages are particularly popular
According to Comparis, the benchmark rate for ten-year fixed-rate mortgages fell to 1.81 percent at the end of September. It was 0.33 percentage points below the value at the end of June. For five-year fixed-rate mortgages, the benchmark rate fell by 0.36 points to 1.68 percent. At the beginning of the year you had to pay 2.26 percent for a ten-year mortgage and 2.13 percent for five years.
The reference rates calculated by Comparis are published, but still negotiable, average interest rates from around 30 mortgage institutions.
Planning security through fixed-rate mortgages
According to the third quarter, around 72 percent of all mortgage borrowers opted for a fixed-rate mortgage with a term of ten years or longer. In the previous two quarters, this proportion was significantly lower at 40 to 50 percent.
On the other hand, the proportion of medium-term maturities (four to six years) has halved to around 14 percent compared to the previous quarter, according to the statement. The proportion of mortgages with terms of up to three years (including Saron mortgages) also fell from just under 20 percent to 7 percent.
The strong demand for longer-term fixed-rate mortgages is no coincidence: first-tier Saron mortgages were recently still slightly more expensive at 1.6 to 2.0 percent than ten-year fixed-rate mortgages (1.5 to 2.0 percent), as it was said. In addition, in view of the ongoing geopolitical risks, many mortgage borrowers prefer planning security.
Ad
Ad
More on the topic:
Swiss National BankMortgageComparis
