Published10. October 2024, 00:47
Mortgages: This is how homeowners benefit from the lower key interest rate
Anyone who has to pay off a mortgage will benefit from the change in interest rates. Long-term fixed-rate mortgages are particularly in demand.
von
Lower mortgage interest rates: That’s what it’s all about
-
The world political situation is uncertain.
-
This is why many homeowners rely on long-term fixed-rate mortgages.
-
The conditions for these are now much better than they were a year ago.
The Swiss National Bank cut its key interest rate to one percent in September. Homeowners now benefit from this because they receive better conditions for mortgages: those with a 10-year term were recently on offer for an average of 1.5 to two percent, the more flexible Saron mortgages for 1.6 to two percent.
Homeowners are benefiting from better mortgage conditions following the Swiss National Bank’s key interest rate cuts.
20min/Simon Glauser
Long-term fixed-rate mortgages are particularly in demand
According to Comparis, long-term fixed-rate mortgages were most in demand in the third quarter. The conditions for 10-year fixed-rate mortgages have almost halved since their peak in October 2022, says Comparis expert Dirk Renkert. “In view of existing geopolitical dangers, many mortgage borrowers now prefer planning security.”
The Swiss National Bank lowered the key interest rate this year from 1.75 to 1.5 percent in March, to 1.25 percent in June and to one percent in September. There are several reasons for these decisions, including falling crude oil prices and the strong franc. They led to a weakening of inflation. Economic developments are now seen as a greater danger again: Structural problems in Germany and the real estate crisis in China are weighing on consumer sentiment, according to Comparis. The weak labor market data in the USA also favored the interest rate turnaround.
This is how much cheaper fixed-rate mortgages have become
The benchmark rates for fixed-rate mortgages had been slipping significantly since June and continued their downward trend in the following months. The benchmark rate for 10-year fixed-rate mortgages was still 1.81 percent on September 30, 0.33 percentage points lower than at the end of June.
If the level of mortgage interest changes, this quickly has a major impact on homeowners.
20min/Simon Glauser
The benchmark rate for 5-year fixed-rate mortgages was 1.68 percent on September 30th. It fell by 0.36 percentage points compared to June. At the beginning of the year, the benchmark rates for 10-year fixed-rate mortgages were 2.26 percent, and those for 5-year fixed-rate mortgages were 2.13 percent.
Future development difficult to estimate
“Despite another interest rate cut by the SNB, the conditions for fixed-rate mortgages are still cheaper than for Saron mortgages,” says Renkert. The SNB’s lowered inflation forecast fueled hopes that interest rates would continue to fall. “Conversely, the negative consequences of increasing escalation in the Middle East, such as the development of oil prices and supply chains, remain difficult to estimate,” says Renkert.
Are you following 20 Minutes Business on Whatsapp?
Here you get the latest news from the business world and the hottest updates on consumer topics directly to your cell phone.
