I will also renew soon, and looking to potentially switch my mortage provider, since their rates aren’t the best (kantonalbank…).
I wonder how it works: I have 1 tranche coming up in mid 2025, and the 2nd and last tranche in mid 2028. If I switch provider, will I also need to fix my 2028 rate when I fix the 2025 one? So in this case I should also calculate how much I am “losing”, since my 2028 rate is quite good, no?
Also, if I switch mortgage provider they will re-check everything I assume (income, affordability, etc.), but then I can also request they re-evaluate the value of the home (which helps with reaching a better affordability), or am I mistaken?
@mods: not sure if if this is offtopic or not. In case feel free to make it a new thread
I wonder how it works: I have 1 tranche coming up in mid 2025, and the 2nd and last tranche in mid 2028. If I switch provider, will I also need to fix my 2028 rate when I fix the 2025 one? So in this case I should also calculate how much I am “losing”, since my 2028 rate is quite good, no?
I don’t think you can switch provider now, unless you are able/willing to pay the penalty for the early termination on the 2028 tranche. That’s why tranches with non-matching maturity are usually not recommended.
If your 2028 rate is good, it might not be that bad though (but at the same time, it means giving up on a good rate). If I am not mistaken, the penalty is usually based on the difference between the current rate and your rate: going from low to high is cheap because they would rather get that low rate mortgage off their books.
Maybe a solution is to switch your first tranche to SARON/3y-fixed for the next 3 years, and then re-evaluate in 3 years?
As you said, you need to do the maths to see what makes sense.
Also, if I switch mortgage provider they will re-check everything I assume (income, affordability, etc.), but then I can also request they re-evaluate the value of the home (which helps with reaching a better affordability), or am I mistaken?
Yes to the first one, and I would say yes to the second one, but not entirely sure.
Everyone is expecting the SARON to drop more, but it doesn’t mean the fixed will go down hand in hand.
Do you want to amortize any of it?
Do you want predictability of the payments?
Would you consider doing part fixed, and part SARON?
If I were in that situation I’d probably do a mix of SARON + Fixed at 1.3% to have a mix of predictability and flexibility to amortize some (or lock in more if fixed rates go down more)
Does that mean the Bank Margin is = (1.39% - 0.5825%) = 0.8075% ?
or is there some additional markup “D” for counter-party risk etc? (and therefore the equation becomes A = B + C + D ?
And side question - is it reasonable to think that the “10y” fixed @ 1.39% is “easy” to obtain from most banks right now? or is that MoneyPark quote just a best case scenario ?
For the banks I work with yes, whatever is on top of the base rate (swap in that case) is considered margin. However the margin could be coming from different departments within the bank. For instance the treasury could decide to introduce a liquidity markup because the market conditions are bad and those kind of markups would be hardly negotiable and could be considered part of the base rate.
The pricing of a saron tranche is a lot simpler as you really only have two components.
Hi Phil - I think BVK is similar to some of the bigger banks, they don’t seem to be very aggressive on the fix rates (they seem to be about 0.15 higher then what should be obtainable). As far as I can tell the fixed rates haven’t changed much in the last 1 week.
Normally I check on hypotheke.ch (10y = 1.42) and moneypark.ch (10y = 1.40) to see approximately what kind of 10 year rates are “possible”
… of course it depends on your situation, the home, and the financial institution if you would be eligible for that kind of rate.
I agree. Hard to have a financial seppuku with a 1.4 rate; may be worth it for peace of mind. If I was offered that today I would bite (at least on a tranche).
I will wait longer as I have some fixed at 1.0 and some SARON (which is expected to drop soon), and I’m certain I can’t get the 1.40 while we are still “locked” with a fixed tranche.
I have to either:
“eat” their fat margin padding on the fixed rates today which I don’t want to do because I also lose the ability to amortize via SARON (and the whole world is in dove-ish mode).
wait another year to go open market on fixed rates (and decide then if it’s worth it vs keeping SARON)… which for the moment is what I’m expecting to do.
0% SARON again in 12-18 months is my bet.
Eurozone and US are crawling under debts payment and can’t keep rates high. Inflation will repay their debt.
On the other hand SNB will have no other choices than switching to “repression mode” to fight further CHF appreciation.
In this scenario cash is trash, Rental properies and equities with leverage are the winnings horse.
What I like about fixed rates is that I can pile the surplus savings into the market with a known cost, so I hope those come down even if it’s just a bit more from here.
I agree with you on this, but I wonder if SNB will try to keep rates high to fight inflation. They were one of the first in the western world to raise. Then again, maybe there won’t be any inflation if there is a downturn/recession.
Yes for medium terms you are totally right. Deflation is their concern
Anyway we have no idea if a bigger second inflation wave comes again in 2026 or 2027. Probabilities are far from 0
Just my opinion - personally I don’t see the 2nd wave of inflation coming any time soon. Pretty sure this wave was caused from all the money printing / covid stimulus worldwide, which is why it is already subsiding.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
