Also in general business contracts 
Same with manpower costs using 20 working days a month as a general approximation.
Stupid question as I am not particularly qualified in economics, but are the US taxes susceptible to have influence on the Swiss National Bank and its interest rates?
Following the U.S. decision to impose 39% tariffs on a range of Swiss exports, the Swiss economy faces a potential drag on external demand and a risk of CHF appreciation. The SNB cut its policy rate to 0.00% on 20 June 2025 to support growth and counter currency strength. The next monetary policy meetings are scheduled for 25 September and 11 December 2025.
A September cut is plausible if incoming data confirm weaker growth or a stronger franc; a second cut in December would require clear signs of a deeper slowdown. However, the impact on mortgage rates will vary: fixed-rate products have already partially priced in lower rates, while SARON-linked loans in many banks are bound by a contractual floor near 0%, limiting any further pass-through.
(Formulated with GPT 5, but my economist POV is exactly in line).
Gpt once again hallucinatingā¦
Nor many banks use contractual floor of 0%. ALL the banks instead!
Happy if someone could prove me I am wrong!
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It is just trying to be gentle and kind while talking to mere humans.
A thought going into negative interest rates.
Fixed term mortgage rates can be modeled as the respective interest rate swap plus bankās margin. Saron mortgage is Saron rate + bankās margin. For the same level of risk, letās say, bankās margin is the same. The interest rate swap is more or less average (integrated) expected Saron rate over the respective term.
So far, while comparing fixed and Saron mortgages, everything looks neat and efficient.
BUT: the Saron rate that is used to determine the mortgage rate is floored at 0. So, purely from efficient market hypothesis, when short term rates become negative, fixed (short term?) mortgages should theoretically come out cheaper than Saron mortgage over the same period.
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Okay, first a disclaimer: I am rather talking about a theoretical financial-mathematical exercise.
I am afraid you are doing the same mistake that many people do when they talk about mortgages: ignore the duration. I think somewhere in the second half of 2024 there were articles from Swiss financial press popping out saying āOh, Saron mortgage is now cheaper than 10 years mortgageā and I was like 
.
Now, when the short term rates are negative, at any given moment you can take a 2-3 years mortgage with a rate higher than Saron (floored at 0) + bankās margin. But once you took this mortgage, the situation is not equivalent: the fixed rate remains fixed while Saron is floating. The fact that the fixed rate is more expensive than current Saron mortgage rate is not surprising. With fixed rate mortgage, you buy a protection against the risk of short term rates spiking. With Saron, you are exposed to this risk yourself.
Your comments stating that last 20 years Saron mortgage was cheaper than fixed ones is of course correct, but it is just one of many possible outcomes that has materialized. A good outcome doesnāt mean that the decision leading to it was good, and a bad outcome doesnāt mean that the decision was bad. In this case, most of the time the risk of high short term rates did not materialize, and as with Saron mortgage you didnāt pay a premium to protect from it, you are better off.
What I mean is comparing two scenario, were the comparison is meaningful:
- You take a fixed mortgage at current rates for, say, 3 years.
- You take a Saron mortgage and pay it for next 3 years, whatever the rates are.
We should compare total costs in both scenario.
Letās say you started in, what, 2016. Next three years the short term rate is negative, if you pay only Saron margin, your total costs are lower than with the fixed rate mortgage.
Another possibility is that you start in 2021. Your fixed rate mortgage remains the same as in the first scenario. But if you would take Saron mortgage, you would go through some spikes in short term rates and most probably you would pay more than with fixed rate mortgage.
If someone wants to actually run these two scenarios, please go on, but I wonāt focus on them.
So, at any given moment the future is unknown and the short term rates can go through very different trajectories. Now, as there is an asymmetry with Saron rates - the negative rates are not transferred to borrowers, while positive rates are - I am asking myself if (well, theoretically) the potential āpremiumā that you earn if future rates are low is in balance with potential āpenaltyā in case that the future rates are high?
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Okay I will try to give an example of this asymmetry.
Letās say we perfectly know short term interest rate for next two years:
Year 1: -0.5%
Year 2: 1%
Bank margin is, letās say, 1%.
The interest rate swap to borrow money between banks for 2 years is therefore 0.25%.
- You take 2 years mortgage with a fixed rate. This rate is 0.25% (swap rate) + 1% (bankās margin) = 1.25% p.a.
Over two years, you pay 2.5% of the borrowed amount as interest.
- You take Saron mortgage with the same 1% bankās margin.
In year 1, you pay 1% of the borrowed amount as interest.
In year 2, you pay 2%.
Over two years, you pay 3% of the borrowed amount as interest.
In this example, there are no rate spikes, all comes out exactly as we have expected. But with Saron you pay more, and the difference is exactly 0.5% of rates below zero for one year that was not transferred to you as a borrower.
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I think another factor that could evolve is the bank margin on saron mortgages. As they make money by borrowing (negative interest rate) to lend to you, they have another source of profit in the deal than just the interests you pay to them.
They may be willing to accept a lower margin, varrying depending on the length of the contract, in order to outcompete the other banks and issue the mortgage themselves.
Thereās still a hard floor at negative interest rates +0% bank margin if rates go really, really low below zero so there would still be an asymetry in some cases.
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Exactly. In this case my assumption of the same margin wonāt work. The question now is if your supposition works in reality and how much is the difference. My impression from looking at some sets of offered rates is that lenders propose the same Saron margin as they add to interest rate swaps to derive fixed mortgage rates.
Another factor to take into account, in my opinion, is that yes, you at least theoretically, on average, pay more for a fixed term mortgage than for a saron one but doing so, you also reduce uncertainty in your future and can be (slightly) more agressive in your investments than you would be able to afford with a saron mortgage for a comparable level of general risk that you take.
Edit: or, in short, the question between saron or fixed rate isnāt necessarily āwhich one will have me pay lessā but ādo I need/want the insurance coming with a fixed rate and what can I do with it?ā
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Why is it that SARON rates are capped at 0% and never negative? I mean, the bank makes the money through itās margin while rates are positive, why should the margin be bigger when rates are negative?
Iām sure Iāll regret writing this one but the economy would be pretty screwed if we could make money by borrowing money.
Banks and very highly rated institutional borrowers get to do it but the little man canāt. 
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because you (or any other shareholder) want a dividend when holding bank shares.
Iām not sure. I actually want something adequate when risk-adjusted when I hold shares, but if risk-free rate as defined by SNB/interbank is negative, Iām happy with less.
If I would expect always some defined dividend/ return, then mortgage should be fixed and independent of monetary policies.
Yeah, banks will protect their margins. That said according to https://www.snb.ch/public/publication/it/www-snb-ch/publications/research/working-papers/2020/working_paper_2020_05/0_it/working_paper_2020_05.n.pdf they did loosen lending conditions (mostly on the longer term fixed loans where the spread was reduced).
And they swallowed up a lot of consumer deposit costs as well by limiting the negative interest rate charges (which I benefited quite a bit from, had cash in 3 places to benefit from them not passing down the negative rate).
You can with box-spreads.
During the height of the negative interest rates, you could do an SMI box-spread and get paid for borrowing money.
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I didnāt know this term, so I searched for it and found the usual stuff (Wikipedia entry, ā¦). But no explanation or discussion how I could potentially use box-spreads.
Process is described here, for CHF youād need SMI options.
And depending on volume, soemthing that could flag you as a professional trader potentially, as itās an option strategy.
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Dear all,
Iāve an investment property where Iāve received an offer from Raiffeisen for a saron mortage with 0.8% margin. Iām currently hesitating whether to take it for the 3 or 5 year duration? What would you recommend. I thought 3 year gives me more flexibility in case I want to sell or get an even better deal at renewal in 3 years, but I thought 5 years on the other hand could be better in case margins are higher in 3 years and I delay the admin overhead for renewal for another 2 years as the margin of 0.8% is already decent. Would appreciate any perspectives on this as Iām new to this.