“Wie heute besprochen, hat die Margenerhöhungen nichts mit Ihnen als Kreditnehmer zu tun. Die Margenerhöhung basiert auf den seit Mitte letzten Jahres massiv erhöhten Refinanzierungskosten sowie der seit 01.01.2025 geltenden erhöhten Eigenmittelunterlegung von Krediten in Abhängigkeit der Objekte, die die Kredite massiv verteuern.”
They change it from 0.65 to 0.86%, which for the amount of loan I have means ~1k more/year. Very annoying even though it wouldn’t break my economy.
I need to check the contract to confirm, but I guess they can do it. Unfortunately I have another tranche with the same bank with a fixed mortgage (was a bargain when I got it, now it’s not that great deal anymore) at ~1.5% expiring in 2028.
Do you think I can do something about this? A potential card up my sleeve might be the fact that due to appreciation the property is undervalued by the current bank’s assessment, i.e., the 75% loan they granted me is probably more like 60% if the current market price would be considered.
Also, anybody knows that they might be referring to exactly with “letzten Jahres massiv erhöhten Refinanzierungskosten” and “der seit 01.01.2025 geltenden erhöhten Eigenmittelunterlegung von Krediten”?
Well if it’s a pure Saron Rollover I guess they can raise the rate whenever they want…
I have a 0.59 and 0.65% SARON and I suppose I’ll be soon treated like you. Bank margin must go up with Basel III, if we don’t go back to negative rate the SARON margin will never come back to 0,5%
You have/had a great margin, but that doesn’t mean you have to accept such a unilateral change*. As you wrote yourself, check your contract T&Cs. It will likely include a wording that they can change the margin in case of regulatory changes. But, there is a couple things to consider here:
Their reference to higher refinancing cost since last summer is irrelevant. That is their business and not a regulatory change.
There was a regulatory change coming from Basel III effective as of January 2025. However, this was known for a long time. Unless you have an old, long-standing contract, I’d doubt they can use this to claim a regulatory change (because it doesn’t count if they knew this was coming when you signed your contract).
That Basel III impact is likely less than the 21 base points they want to increase your margin. In fact, owner-occupied with LTV of max. 50% would be cheaper for the lender with Basel III (with LTV between 50% and 65% pretty much unchanged).
I would ask them to reevaluate your home and if that shows that your LTV is at around 60% as you suspect, flat out decline their increase and push back hard.
*my answer is based on this being a one sided change within your contract term. If your contract term is about to end, and this is technically a new contract offer, then everything goes. But in that case do yourself the favour and go looking for other options (even though 86 base points isn’t too bad).
I’m guessing it ‘ends’ because it is a 3-month/6-month SARON which can be reset/cancelled every 3/6 months. So they are basically saying, “here’s the offer for the next 3 months, else pay back the capital.”
SARON has flexibility as you can cancel at regular intervals and switch to fixed. I guess we sometimes forget the flexibility also works the other way around and the bank can also cancel or ask for more margin.
Yes that’s the case here. I could easily shop around for another offer except a) I would not bother to save 1k/year given how busy I am lately and b) I have that other (similarly-sized) fixed rate tranche
When I had a SARON mortgage, I chose a 6 month period as that gave me enough time to find a different vendor. 3 months doesn’t give you enough time to switch unless you are really on the ball.
Are you sure about that? Typical SARON mortgages have a short, e.g. 3 months, SARON reference rate (meaning every 3 months your SARON and hence your total interest rate change), but a multi-year contract frame, e.g. 3 or 5 years, and only then do you have to renegotiate and the bank margin can change. If you believe you have a mortgage that your bank could just decide to discontinue every 3 months you either haven’t understood your contract or you have a very special mortgage. Edit: Seems like I missed that development, see post below.
When I was looking a few years ago (when it was LIBOR and not SARON) most had this 3/6 month model. When I looked again just before covid (and since then) it seems that this less common and many SARON have long lock-in periods.
It is (or at least was) special, but you are right, I seem to have missed that development. I knew the digitally inclined cantonal banks (GLKB, SZKB) were offering these kind of mortgages, but it seems to have spread and be more available nowadays. But in that case @Giff: Yes you are out of luck. Both you and your bank can renegotiate the mortgage every 3 months.
The second part of this phrase is important. Renegotiate.
I think @1742 made a good overview for the arguments. You are still a client and present them your terms for the new contract. But sure, you would be in a better position without one part fixed term.
Anyways, I still would negotiate. Start with a email.
If it is 1000.-/year it sums up to 4000.- until 2028. In my opinion worth 30mins of time to write something down.
So I wrote to them and they said they could only lower the margin if I invest with them (they know I have a sizeable IBKR portfolio…). After I asked them how much I should invest and at what cost and for which margin reduction, here is the answer:
“In Abhängigkeit der Anlagesumme könnten SARON-Margen-Reduktionen erfolgen. Für eine Kleinstreduktion wäre eine Wertschriftenanlage von mind. CHF 500’000 notwendig. Für eine grössere Reduktion wären mind. CHF 1 Mio. notwendig.”
Seems like you need to scout the market.
I would just do it out of revolutionary spirit They are actually betting on the fact that you will be too lazy for 1000 CHF/y
if you can reduce your LTV to 60% you should be heavily subsidized by the Basel 3 regulation.
Ask for a reevaluation of the property now, since its now only allowed every4 years.
The bank needs to post more capital for your higher LTV, therefore they raise the margins.
Let me guess UBS?
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They are actually betting on the fact that you will be too lazy for 1000 CHF/y