Mortgage rates in Switzerland [2025 edition]

Real Estate
383

Looks like post the SNB announcement the fixed rates are trending upwards, possibly due to the Israel-Iran situation.

Have 2 options on the table (planning a 50:50 5y and SARON split)

  1. Cantonal bank - 5y at 1.14% and SARON (3 year framework) margin of 0.89%
  2. M Bank - 5y at 1.07% and SARON (no framework) margin of 0.87%

Got it from cantonal bank today and M bank sent it more than a week back; hope they still keep those rates. Need to take a final call this week o have enough time to have everything in place for the notary.

384

People above reported better SARON margins (sadly my bank raised mine and I am very close to your offers now).

385

Yes, the SNB seem quite proactive. Makes a big difference from the Fed who will be watching the horse running around in the field to make sure the data shows that it has really bolted before shutting the stable doors.

386

Situation seems very much not comparable, CH has currency getting stronger, negative inflation, etc.

(and iirc if what you’re referring to is the slow reaction to covid induced inflation, I don’t think the SNB was faster than the Fed to raise rates)

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387

Indeed, Swissquote advertises 0.5% SARON and 1.14% 5Y. But people mention that with them you cannot use invested 3A indirect amortisation, if that’s what you plan to do. Also, VIAC has 0.65% SARON and 1.20% (or so) 5Y, but with them you can use invested 3A for indirect amortisation. Just in case you’re considering checking other options.

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388

I think SNB has a smaller base to manage but they tend to manage it very well. Having said that they also have a reasonable political situation to deal with and a low debt nation.

For Fed life is complex because US is drowning in debt and hence FED always needs to wait for politicians to do something (war, deals with other countries, coercion etc ) to keep USD strong while FED can print more of it. I wouldn’t like to be in their job.

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389

My brother fixed his mortgage for his first flat (4.5 rooms) last week.
He splitted his mortgage 50/50 10year fixed/saron (don’t forget splitting your Grundpfand as well ).

For the 10 year fixed we could fix it at 1.33% and the Saron with 0.7% (the advertised rates were 1.95% and 1.0%).
The Mortgage is with the local Raiffeisen. Only UBS made a slightly better offer with a 10 year fixed at 1.30%. But he understandable prefers the local Raiffeisen over UBS.

Was good to have a read in this thread beforehand the negotiation for what is possible/illusional. Thanks for that.

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390

Yea, I haven’t got any SARON rates less than 0.85% from 4-5 different banks.

Both UBS and Raifeissen (which seem to be the ones with the best rates above) came up with lower valuation in my case and asking for higher equity.

I guess individual situation would vary to determine the rates as well. My mortgage is at a 90% LTV (including Pillar 2 pledge) and from what offers I have got, these 2 are the best.

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391

I think I read here that SwissQuote does not finance new construction properties and I guess VIAC is not accepting new mortgage applications.

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392

Did you have a fixed term mortgage or SARON as well?

I’m taking 50:50 split SARON and 5y. For the direct amortisation, does it make sense to amortise the SARON part or the fixed part?

393

Another positive experience with UBS. They have released the pledge on all our UBS 3A assets (approx. 110 KCHF), which makes it possible for us to move them to VIAC/FinPension immediately.

Only good things to say about them (and especially our relationship advisor) during the past 7 months of the mortgage process.

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394

I have a mortgage with UBS too. They might not always have the best rates, but they are professional and easy to work with.

395

I agree that they never create problems when you try to close account or move money out. I found it rather surprising but also very nice to work with

I closed 3a -: no problem
I moved from paid package to free package - no problem

Personally I have never really faced any problems with UBS. They have higher costs but they do not pester you to stick to them.

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396

With SARON going to 0% now, the 5y fixed term rate is higher than the SARON. So, the bank advisor suggested amortising the fixed term amount is more beneficial.

He explained that the mortgage amount is re-baselined every 6 months by reducing the direct amortisation. So, the interest costs for the fixed term would also gradually reduce. This is the first time I’ve heard about this - guess this is a standard thing?

Also, looks like the direct amortisation can be moved from fixed to SARON at any point and not the other way around.

397

Yes it’s normal if you choose direct amortization every half year. You pay off the principal and thus a lower amount on which to pay interest the next time. Be aware it can be sometimes higher or lower (e.g. if you compare September and December interest payment) since the calculation for the interest is usually days and sometimes it is one or two days difference depending on the calendar. Usually it is around 91 or 92 days.

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398

What’s the standard for calculating mortgage interest payments in Switzerland?

We’ve just made our first ever quarterly mortgage interest payment. I was trying to calculate exactly how much it would be, and ended up being wrong, though not far off. Got me rereading the loan documents and found that the interest for our SARON mortgage is calculated using the “actual days / 360” method.

Basically the interest rate is divided by 360, then multiplied by the actual number of days in that quarter (92 for Q3), then multiplied to the mortgage. So for example, the Q3 payment for a mortgage of CHF 1 million with a 0.55% rate (SQ) would be CHF 1,405.56

Contrast that with how I assumed it was calculated (this is the predominant method in my country of origin), which is the “actual days / 365 or 366” method. Same steps as above but dividing by 365 instead - the payment for Q3 with the same parameters would be CHF 1,386.30

Tiny difference, yes, but 19.26 per quarter, turns into 77.03 per year, then before you know it, you’ve paid an “extra” CHF 1,155 over 15 years just because somebody decided it would be a great idea to define a “year” as 360 days instead of 365/6!!!

Setting aside the problematic morality of this practice, for those who have a SARON mortgage, what method does your lender use? And just out of curiosity, is this something that can be negotiated out of, or specified during a mortgage renewal?

I know it’s incredibly dull and a bit pedantic, but I have the time, and apparently so do you, if you’ve read this far :sweat_smile:

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400

It’s common practice and is a way of ripping you off by about 1.5%.

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401

Yeah it‘s normal. Fixed-rate mortgages don‘t do this, then it‘s actually 1.00% (for example) divided in 4 quarters. A Saron margin of 1.00% would end up in 1.015%.

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402

I believe it is also common practice to use 360 on the taxes as well in relation to this.

403

Also leasing and everything else related to loans.

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