The bank that’s too big to fail. 
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+1 for these questions! I also wonder how it is, when one could expect reassessments, in my case, especially what BCV tends to normally do ;).
FYI - we bought a house in 2021, took over the mortgage with 4 tranches from the owner and then added 5th tranche on top - fixing it for 10 years. Then we were renovating and in 2023, we’ve added 6th tranche on top. They were not requesting any supporting documents, apart from renovation related.
Also in 2023 we have blocked the rates for the tranches we took over from the previous owner (which were expiring in 2024). Again - no questions about salary or tax certificates asked. So I wonder when normally we could expect that again.
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Sometimes banks ask you to sign a power of attorney that they can use to check your financial situation. Also, if your salary account is with the same bank, all income is visible by default and checks are done in the background.
One question I have is: if you have indirect amortization via 3a and you stop working, are you still allowed to contribute to 3a and do the indirect amortization? Or what happens in that scenario?
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Why don’t you consider a fixed term mortgage, then?
What does “unlimited” mean here? In my case it’s unlimited but can be changed by either party every 3 months.
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This is good, where do you get this from, if I may ask?
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The product you chose is independent from the frame limit (i.e. the credit line) and the review process is typically enforced at the credit line level, that is, regardless of what bank you go for they will do reviews of your situation (in general yearly). Sometimes this process will be seamless to you because you pay on time and they see money coming to the account but in other cases they might ask you to provide some documentation and justify again your income. If you read the fine prints of a mortgage contract (again the credit line one and not the product one) it is quite often found something along theses lines : “should your situation or that of the market change, additional collateral may be asked by the bank”.
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Some banks require a formal review at the end of the term so want to see you bank/salary statements etc.
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I’d go with the shorter cheaper one unless there’s a specific reason for why you expect your job situation to change.
There I would read the contract carefully. I am pretty sure there will be a litte clause saying they can reassess the situation at any given time. Can’t imagine a bank taking that risk.
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Wow, thanks for all the insight, lots for us to think about and reconsider.
@baldur good to know! I guess based on the succeeding responses from the other members, the bank could do some checks in the background - particularly if you have your salary accounts with them as well.
@evertruelife I would assume there’s nothing stopping you from depositing up to the annual limit to cover the amortization. Google AI says “Yes, you can contribute to a Pillar 3a account even if you are unemployed and receiving unemployment benefits, as these benefits are considered a substitute for earned income.”
@Dr.PI Rates and overall cost for us would probably be higher, and we’d still have the same “problem” of having that mortgage renewed when the term ends - including that very small risk that one of us would be unemployed and we’d be unable to refinance/burdened with really high rates.
@Giff My main assumption was that “unlimited” meant you’d be free of the heavy creditworthiness checks as long as there are no late payments i.e. you wouldn’t need to show salary certificates, tax returns, etc. But thank you for pointing out that aspect of either party having the ability to change - will look out for that in our contract.
@HoiZame and @PhilMongoose thank you very much, that’s really helpful! Now we’re leaning towards the bank offering the lower interest rate since there doesn’t seem to be much of a benefit in terms of avoiding a full review even in an unlimited term mortgage.
@Patirou yes, it seems like it. I think I was too optimistic about my earlier assumption that they wouldn’t check if everything is paid anyway.
What I wanted to get out of this exercise was to find out how we can prepare for our own realistic worst-case scenario and see if choosing an “unlimited” term mortgage is beneficial. From what I gathered with all your responses, it seems that: a) there will be credit checks/reviews anyway, whether that’s in the background or more overt requests for documentation by the bank and you can’t control/predict this process. If there is a short period of unemployment, there really is no way to tell when banks actually request documents so risk-wise it seems the same to me; and b) “unlimited” is mainly a marketing term so it’s really important to read the fine print of their offer to find the best conditions for you.
We’re currently waiting to set the final sale date and are negotiating with the banks - just got notified of their binding offers but we don’t have copies of the mortgage contracts as of yet. I didn’t put the actual rates offered to me just in case people from either bank are also following this thread and I could be identified (hey you never know!). I’ll do a review of our experience with them both including the actual rates once the ink has dried, so to speak.
A final nugget - SQ advertises a 0.76% rate on their website. That includes the current SARON rate of 0.21% so their margin is … 
Thanks again y’all!
is your property already built or under construction?
SQ does not work with properties under construction and there are a handful of cantonal banks who do no operate in this space, so it limits the options.
I am also looking to sign my contract and what you have i.e. .65% margin on SARON is the cheapest I have seen as well!
And this is probably what happened… as I have salary account with them.
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Imo it’s already priced in in the SWAP index, based on the economic numbers from PMI, inflation, unemployement rate, etc. of countries of influence like Switzerland, UE members and the USA. An adjustment from the SNB is primarily a consequence.
personally I’d lock the 10y at 1.42%, and that would be with the intent to put extra cash into equities when the bottom forms. 5y is too short in that timeframe for me to be comfortable with that strategy.
Or I’d do 80% @ 1.42% and 20% SARON, if you intend to amortize some over the years.
just what I would do personally, no idea what your timeline / situation is.
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Very interesting thread, thank you all for the contributions.
Another “noob” question, since we are currently shopping for mortgages and have to notarize before June (tough timeline), and no bank is able to explain this to me in plain terms without going into the benefits of indirect amortization blah blah.
Who decides how much to amortize, can anyone explain that to me?
Let’s say 1.25mn object with 20% down and 1.0mn loan (80%) in a single tranche. Let’s assume no indirect amortization for now.
Aside from the legal requirements to go down to 65% in 15 years, what is the amortization plan here for SARON or Fixed? Do we get to choose?
Is it usual to keep the mortgage as a single tranche open for its duration and pay back the amortization amount (e.g. the remaining 15%) all at once at the end of the tranche?
Do people pay into amortization regularly together with the interests?
Is there flexibility on when to amortize (e.g. bonus)?
Totally confusing, sorry 
- Who decides how much to amortize?
The bank decides the amortization schedule based on the loan amount, property value, and legal 65% LTV rule, but you can discuss terms within those constraints. - What is the amortization plan for SARON or Fixed?
Both SARON and Fixed mortgages typically follow regular amortization schedules, but the frequency and amount can be adjusted within bank policies and the 65% LTV rule. - Do we get to choose?
Yes, you can choose the amortization period (e.g., 10-15 years) and whether you pay monthly or annually, but the mortgage must comply with the 65% LTV requirement after 15 years. - Is it usual to keep the mortgage as a single tranche open for its duration and pay back the amortization amount all at once at the end of the tranche?
No, it’s uncommon; Swiss banks usually expect regular payments with the possibility of extra payments (e.g., a bonus) to help reduce the mortgage earlier. - Do people pay into amortization regularly together with the interests?
Yes, it’s standard to make regular payments that cover both principal and interest, either monthly or annually, to reduce the loan balance. - Is there flexibility on when to amortize (e.g., bonus)?
Yes, but while you can make additional lump-sum payments (e.g., using a bonus), banks may limit the amount you can pay off early without penalty.
The above are answers from an AI.
My personal situation 50% SARON + 50% Fixed (under 1%)
My lender allows me to notify them 6 months in advance to pay a lump sum to amortize some of the SARON tranche.
I am permitted to do that 2x per year (they will allow me to do 3x if I get a large bonus).
When I was negotiating the loan, they rejected my idea of amortizing monthly on the SARON.
In terms of a hard schedule -
Maybe someone here with just a Fixed can chime in?
Otherwise you can ask the lender and read the fine print…
good luck!
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Thank you @FrankenStache, that is really useful !
And I assume there is no limit on the amortization amount that you can add on the SARON (2x year)?
And/or they can retain the right to change margin unilaterally if you reduce the mortgage amount too much for their liking - which I hope is communicated once you announce your amortization intent?
Correct. no limit. I can pay my entire SARON tranche, but I have to give minimum 6 months notice.
Note: I can also convert some or all of the SARON into a new fixed tranche immediately by asking them for the fixed rates and saying I agree to convert it to fixed. If I ever decide to do that I would match the same expiry as my current fixed tranche to ensure that they both expire in the same calendar year (ideally on the same date).
I don’t remember the fine print (but I read and understood every point before I signed). I doubt they can do so as my SARON does not have an expiration date. Check your contracts before you sign anything to understand what the lenders contract terms are.
A more likely scenario that I may encounter is that they may want to impose a higher SARON margin if my fixed tranche comes to expiration and I want to roll them into a new SARON. So I may end up with two SARON tranches with different margins. If they want to get greedy with it, I’ll just accept the higher margin (for the required 6 months) and go shopping for a new lender, but I’m sure I’d tell them this was my plan before it got to that stage, so I’m doubtful they would give me much worse than I currently have.
PS. The below is from AI —
What is the SARON margin?
When you have a loan or mortgage based on SARON (Swiss Average Rate Overnight), the total interest rate you pay is:
SARON rate + lender’s margin (spread)
- SARON is a market rate and changes regularly.
- The lender’s margin is typically defined in your loan agreement.
Can the lender change the SARON margin?
Generally, no — unless the contract allows it.
Fixed margin:
- Most SARON-based loans or mortgages have a fixed margin for the agreed duration.
- If your contract specifies a fixed margin, the lender cannot change it arbitrarily.
Exceptions — when the margin might change:
- Contractual clauses: The agreement includes provisions that allow the lender to adjust the margin (e.g., due to regulatory changes, credit risk reassessment, or increased funding costs).
- Renewal or rollover: When a loan term ends or is renewed, the lender may propose a new margin.
- Extraordinary situations: In rare cases (such as legal or regulatory changes), the lender may reserve the right to adjust the margin.
What should you do?
- Review your loan contract – Look for any clauses about margin adjustments, especially under “interest rate,” “terms,” or “extraordinary circumstances.”
- Contact your lender – They can confirm whether your margin is fixed or subject to change under specific conditions.
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Thanks again @FrankenStache !
I may be wrong but I think @Giff got in a similar situation recently where margins were unilaterally changed (allegedly due to regulatory changes) - that’s why I was curious.
Edit: my bad, re-read the other thread, it was a rolling 3m expiration date.
Good point on the expiration date, I have an offer with a 3y SARON and I don’t yet have the fine print to check if it’s a real expiry date or just a minimum lock-in, but that would be a problem in case of a parallel fixed 5y tranche.
Incidentally, question spurred by recent volatility in the market, for amortizing non-trivial sums what would be the best way to plan 6 months advance - sell part of the portfolio and keep cash for 6 months, or stop contributing to portfolio for the six months prior, or other suggestions?