I checked again. Indeed 0.7 margin is for a 3y-Saron only. Above that margin is at 0.9…
My main bank is at 1.0…
Seems Basel III strikes hard on mortgage… BNS lowering the rates != de facto low (as before 2025) mortgage interests…
It strikes on the stupid risks that some banks, mainly UBS, did take. I think most of the U.S. companies UBS bought in the last decades did not make them a single cent after paying off all the old management. The new rules are mainly to not have to save UBS again.
Banks first move that costs to the mortgage clients as most of them cannot do anything against it. And they make it really hard to compare margin rates, so competency does not hurt.
What bank does offer 0.7 margin for a 3y-Saron? I found Geneva Kantonalbank at 0.78% was the cheapest.
Banks are not the only ones offering mortgages, pension funds and insurance companies do as well.
You can calculate your margins yourself. Just look up the CHF swap rates for different periods. This rate + credit swap + bank margin will be your client rate.
Talking to banks and friends, I can tell you this: Around 0.6% margin is for customers with top ratings. Anything below that is usually a special rate (because you are a private banking customer for example), a limited offer to attract new customers or bank employees.
Also, most don’t advertise their rates at all, or show the rates for the worst possible rating. If you want to get the best rate, there is no way around calling/meeting different banks in my experience.
Why are you so sure it will go to 0 in June? That was maybe clear in December, but now, in the current situation, not so much anymore. With all the uncertainty, a stop to the rate cuts might be more likely.
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Swissquote is currently at 0.74 for 3 years-Saron.
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Last week we got a 0.8 margin with no lock in period at UBS. If I will get the chance, I would shift to something like 1% fixed for 10Y in the future.
I got an offer for 1.09% margin from UBS. That is the bad thing of not paying tax on capital gains, the taxable income is too low. 
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Kinda sad that you can borrow for about the same rate on IBKR!
Yes. But the banks use average while IBKR uses day rates, so it looks actually cheaper. Asked for formula for the average calculation, still waiting.
Is it 1.09% total rate or only the margin ? you can definitely find better than that if that’s only the margin… I’ve never heard of averaged margin in the context of SARON mortgages, however the SARON base rate itself is a compounded rate over a given period which look like an averaged rate over that period.
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Yes, I was referring to the SARON compound rate.
Just signed the new contract at 0.89% margin.
Switzerland is beautiful because I almost pay no tax. But for the mortgage the taxable income is important, so many companies wouldn’t even give me a mortgage. I could just pay it back, but the cash flow from investing that money into my dividend strategy is way higher than the interest I have to pay.
Here is the SARON compound interest calculator:
Der Zinssatz setzt sich aus dem für die gewählte Abrechnungsperiode massgebenden Compounded SARON zuzüglich der oben aufgeführten
Marge zusammen. Der Compounded SARON ist ein durch die SIX Group Ltd. festgelegter Zinssatz. Dieser wird von der SIX Group Ltd. nach
Massgabe der von ihr veröffentlichten Formel berechnet und publiziert. Zur Klarstellung wird festgehalten, dass der Compounded SARON für
die Berechnung des Zinssatzes nie kleiner als Null sein kann.
Dividends are taxable income, no ?
Yes, but “market dividends” or capital gains are not. At the moment one can still deduct the interest on debt, we will have to vote on that soon.
I frequently use expletives but don’t understand your use of the f-bomb in this case.
0,89 is not that bad in your situation. Is there a terms of 3 or 5 years or is it really flexible?
In the market for renewing our existing mortgage (5Y = 0.65%) and just received the following offer from our current mortgage lender (global bank):
Fixed:
- 5Y: 1.30 %
- 7Y: 1.44 %
- 10Y: 1.59 %
SARON:
-
Normal SARON (indefinite term): 13 Months of cancellation notice period if you leave XXXXX or if you want to pay back a part or the whole amount / but if you want to transform it into a fixed one – this is possible at any time (immediate)
-
Effective Normal SARON mortgage rate: between 0.2 – 0.25% + 0.8% = 1.00 – 1.05%
-
SARON Flex (indefinite term): 1 Month cancellation if you leave XXXXX or if you want to pay back a part or the whole amount / but if you want to transform it into a fixed one – this is possible at any time (immediate) + Add on interest of 0.1% - which means:
-
Effective SARON Flex mortgage rate: between 0.2 – 0.25% + 0.8% + 0.1% = 1.1 – 1.15%
OUTLOOK on SARON (XXXXX) – stable up until the end of 2026.
Would appreciate your feedback/critique. We need to make a decision by end Q2 at the latest. Thanks.
Nobody can advise you if you don’t state your aims/goals etc.
UBS offered me 0.87% margin with the same terms. Had a cheaper from Banque cantonale de Geneve.
It is not a big amount and my taxable income is too low for most institutes to even give me a mortgage. I don’t really need the mortgage, but finally signed with UBS, just because I don’t want business with yet another financial company.
If I would hunt for cheaper rates I would ask pension funds and insurance companies, many of them offer SARON mortgages and they are not the target of the new capital requirements for banks.
Or, if you don’t really need a mortgage, at the moment a margin loan in CHF from Interactive Brokers is cheaper than a SARON mortgage. But that will change when interests rise, as IB uses the daily SARON while banks use an average.
Remember that IBKR can demand their money back at any time, so you would either need a very quick mortgage or have other assets to sell. As this would happen in market stress scenarios, you would be forced to sell your assets at the worst possible time to meet margin requirements.
So either you have enough assets with IBKR that they will never force you to pay back the margin, or your portfolio is large enough that you have a personal advisor at IBKR to discuss such facilities would be my recommendation.
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And also, the IBKR margin requirement can increase to any amount, at anytime. In case of a really big and negative major event with high economic uncertainty, you can get liquidated very fast.