Mortgage rates in Switzerland [2025 edition]

Hello fellow Mustachians. We are looking into buying a home this year and also at various mortgage options. As we just start this journey, which is fairly new to us, I was wondering if you could share a few guidelines which could be generally used in our discussions with the banks.

For example:

  • which are decent rates to look at in 2025 at a bank
  • which rates would be a no go for both fixed or SARON mortages
  • is a 3pillar with life insurance something really to avoid
  • how long should the SARON lock-in be (for example not longer than a year)
  • what is an acceptable margin if to go with SARON
  • what’s a good and a bad 3pillar offer from banks
  • etc…

I am not looking for the perfect answers, but rather common sense guidelines when looking for a mortgage in 2025 which would already filter down the bad offers from the decent ones and helps in the discussions with the banks.

How does a decent (not the absolute best) mortgage in 2025 look like?

Thank you in advance!

Hey @evertruelife
We bought a fair while ago (2013) but I suspect the principles remain accurate.
First, we scheduled a bunch of F2F meetings with the main Banks. Mostly, they were uninterested and just handed us a sheet of rates and only answered the questions we asked. Finally we discovered a lovely older gentleman at Bank Cler that took the time to run us through several simulations and even looked at the value of the property we wanted. His engagement was completely different and made all the difference. We landed on three fixed period Tranches (averaging around 0.7%) with different maturity dates so we had flexibility. He also advised that joining SwissLeaders for around Fr. 200 per annum but gain us a nice discount on our rate (saving us thousands).
Fast forward to 2024 and we chose a Variable/SARON rate for 12 months and it started at 2.1% in May 2024. It has dropped nicely to 1.2% as of February 2025.
Since 2.1% is triple of 0.7%, I’d lock in something around 1% for 2-3 years and see how things develop.
Hope this helps?

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hi all,

one related question, how is usually change of provider is happening, for example from one bank to another, at the end of the mortgage term? what are associated costs? how much in advance things have to be arranged? is it required to inform current bank before signing with the new one?

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three different maturity dates provides the opposite of flexibility - you are locked in with your current provider instead. Others can share their experience, as I’m a first time homeowner.

0.65% SARON margin or less is decent. You can get that from VIAC. For fixed rates, hypotheke.ch can give a good indication.

yes - never mix insurance and investing/saving.

some banks offer “flex” products with 3 month cancellation, most 1+ years. less is better of course.

And once you get an initial offer from a bank, is the interest negotiable? How do you make sure it’s the lowest interest rate that you’ll get? You just go back asking for something better? :slight_smile:

the interest is not negotiable. The rate is negotiable if you haven’t signed the contract. The first rate they give you will very likely not be their best rate. Get a competing offer from another FI and then tell them you were also offered X and if they can match. Now if the T&C’s are very different (notice periods etc), you should also factor that into your equation.

Hi all - I am going through mortgage process with VIAC and they have mentioned this condition:

“The existing bearer bond (Inhaberschuldbrief) will be cancelled and replaced with a registered bond (Registerschuldbrief) of mortgage loan amount”

Wanted to get your view on:

  1. Whether it is a standard practice? Our property broker in Canton VD told us that we should be able to use the seller’s mortgage note

  2. What could be the reason behind this request?

  3. Any estimates on cost for this request in canton VD

Thanks a ton

Yes, this is standard.

Switching from an ancient paper solution to a modern, digital solution just generally seems like a sensible idea.

Don’t know about VD, but the three cantons I know all are around 60 CHF (might be three to four times that if you change amount, ranking, etc. at the same time).

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@1742 - thanks a ton.

Just got the update from Notary: Apparently the seller’s bearer bond (1st rank) was for 1.2 Mn. As the new bond would be for 1.6 Mn (1st and 2nd rank) - there is an estimated cost of 3800 CHF!

I am centralizing here some of our findings, valid as of Q1 2025, I might update in the future. I hope they help someone who is just starting this journey, as preliminary information:

  • usually indirect amortization via a 3a pillar is a good idea.
  • notary fees are maximum 2,5% of the property value for the buyer and 2,5% of the property value for the seller. Several banks mentioned it can actually be lower, towards 2% maximum for each party.
  • SARON is a good idea if you can handle the risk.
  • a good SARON has a lock-in period of 6-12 months, but many banks have a standard 3 years lock-in period
  • A 0.65% margin for SARON is great, most banks offer something around 0-8% - 1.1%, which can be negociated.
  • pledged amounts instead of sold funds are increasing the mortgage with the corresponding pledged %: example:
    • 10% cash, 10% pension assets withdraw = 80% mortgage
    • 10% cash, 10% pledged funds = 90% mortgage
  • ALWAYS take out equal length mortgage tranches.
  • A margin of 0.9% to the current swap rates should get you a good interest rate you could aim to get from your bank. Current swap rates here: https://zkb-finance.mdgms.com/home/bonds/index.html
  • hypotheke.ch can always show you current interest rates you can aim for.
  • the most expensive banks are also the most responsive ones.
  • everything can / should be negociated (example: we said no to a bank due to their bad pillar 3a, which we didn’t wanted to use anyway for the mortgage. But they requested that pillar 3a must be moved to their bank regardless of using it or not… Only after saying no, thank you, we’re out, they accepted to continue negotiations without considering moving our 3a funds to their bank).
  • if you want to sell your pension funds, it’s better to sell in 2 different years, for tax savings. If you buy in Q1-Q2 this might be harder to do. A tax calculator for estimating taxes to be paid can be found here: Calculate taxes when withdrawing capital | PostFinance

Happy to adjust if you have feedback so this gets more and more accurate.

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thanks for this great summary.
Could you tell which bank accepted to use a 3rd pillar from another provider?

on an unrelated note - the best SARON margin I could find is from Swissquote at 0.55%
anyone has experience using them for mortgage?

What I meant to say is that we don’t plan to use our 3a funds for the mortgage. However, the bank asked that regardless of not using any 3a funds for the mortgage, the 3a fund should be with them going forward :grimacing: We had to actually stop the discussion / negociation and refuse them, and only afterwards they said, ok maybe we can ignore this aspect. :roll_eyes:

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so you are not planning to do an indirect amortization via 3a?
is my understanding correct? or not using 3a funds to be part of the 20% deposit requirement

Depends… indirect amortization would be possible via viac, that’s our first option, but they haven’t responded yet to our mortgage request for a week now. Chat support mentioned that they have a lot of requests and might take a while… As a back-up, we are also talking to other
banks, and in case we have to choose another one (assuming it doesn’t work out with viac due to late response by the time we want to buy), the second option for us would be to sell funds from pillar 2a and pay the 20%. This is not what we want, but rather a back-up solution. If we were to go this way, I would only choose a fixed 2-3 year term and then move to indirect amortization via 3a.

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Quick search tells me that VD is one of the most expensive cantons for Schuldbriefe. No surprise there, but the quoted 3’800 CHF seems to be the fee for invalidating the old, and separately establishing completely new notes. Why does your notary think that is required? Why not at least transferring the old one cheaply, and only creating a new 2nd ranked one for the 400k CHF increase? That should be doable for around 1’000 CHF, unless you further mess with the ranking and are forced to create completely new ones.

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How would you do that? You can only withdraw once every 5 years as far as I know.

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I assume it’s just one withdrawal request, for one house purchase, with two different payments / transfer dates?:roll_eyes: