I just renewed a tranche SARON at 1.1% margin. I didn’t have much negotiating power because I’m locked in with the bank because of the other tranches (10 years with different expiries) and this is in a real-estate company, you get worst deal than for primary residences.
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I was happy to lock in at 1.45% for 9 years.
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One of the banks I work with has pushed their Saron base margin to 1.2 recently (vs 0.8 back in 2024…). With such a margin the best clients now get 0.8 to 0.9… the walk in client will get 1.1 if he negotiates with the advisor but renewals are still happening at the rate clients had when they first signed. Since the collapse of CS banks have filled their books and borrowers don’t have the upper hand anymore…
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That’s also what an average SARON should give you over +10 years, isn’t it? Maybe even lower.
but maybe even higher, now he knows exactly how much he’ll be paying for 9 years, which is in itself valuable (how much, depends on each person)
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average swiss base rates over history is around 2%.
average margin over base rates is about 0.9%.
so saron average over history should be around 2.9%.
over course, base rates have been around 0% since dotcom crash.
during 70s inflation period, it was around 5%.
I’m paying around a 0.5% premium for the certainty assuming that base rates remain at 0% for 9 years.
given the Iran situation, I’d give a 25% chance of an inflationary 70s like scenario of occurring.
25% * 6% + 75% * 1% = weighted average 2.25% expected cost of SARON. fix at 1.45% wins.
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Edit: Ninja’ed by @PhilMongoose
The Hypotheke.ch data start at the period of high rates in the 90s and has time series where rates almost exclusively went down. In that context, SARON performs better than rates fixed with higher future rates expectations. It would be interesting to have series from 1960 to 1970 and/or a set of series between 1970 and 1990.
I would personally go SARON but can see the value of fixing the rate at a low enough level. The upside of going SARON is capped (by the margin over SARON that will always have to be paid) but the downside isn’t (rates can go up by quite a bit. The mean rate of all mortgages was apparently around 7% in 1990-1992 : Historical time series - Serie 4, tabs 4.1)
Odds are SARON will win but, depending on the situation, it can also put you in a situation where affording your payments becomes a drain.
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We buy insurance, but often self-insurance is cheaper. However, we buy insurance when the impact is too big to self-insure.
So the first thing to ask is whether the risk of interest rates going to, say, 7% + 0.9% margin = 7.9% for a few years is too big to self-insure. If so, then you need to fix and build a buffer to reduce the risk during the term of the fix.
If not, then it is not a question of insurance but of interest rate speculation. Then it is more a personal question of what you want to invest/speculate in.
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This!
Did you use these numbers for your own mortgage calculation? They seem quite high to me. But of course, they make sense for a serious stress test.
Got mortgage and bought a house!
Mortgage Bank: UBS
Property price: CHF 1,200,000
Downpayment: CHF 60,000 cash (5%)
Pledge (Pillar 3a): CHF 81,500 (6.7%) - invested in UBS key4 100% equity fund with 0.75% fee (fund fee = 0.25%, custody fee = 0.5% ).
Pledge (Pillar 2): current balance ~ 120,000 CHF (10%)
Total mortgage: CHF 1,140,000 (LTV = 95%)
Amortization: 20,000 CHF per year = Indirect (14516 = X2 Pillar 3a) + Direct (5484)
Loan-to-Value: starts at 95% and will reach 92.5% in 5 years. After which a re-evaluation of property will likely make amortization below (14516 = X2 Pillar 3a allowance). Even it doesn’t, I don’t mind paying down <0.5% of property value over next 10-15 years.
Affordability: below 33%
SARON margin: 0.65% for an unlimited term (whole mortgage, single tranche)
SARON Terms
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No penalty for moving to fixed mortgage, or paying down a chunk with 13 months notice (that’s what Relationship Manager says, but we have no plans to pay down over next 10-15 years anyways)
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No penalty for the closure if the notice period of 13 months is given.
Comments:
Cash Downpayment: I wanted lowest possible downpayment to keep the assets invested (held in brokers outside UBS, and not pledged).
Pillar 2: We could have sold, but the funds are giving decent returns (2.5-3 % over last 5-6 years). Our marginal tax rate is between 35 and 40%. The marriage penalty ending in 2032 gives us next 5-6 years of voluntary buy-ins in my spouse’s Pillar 2. Not optimal to do in early 40s but our Pillar 2 balances are small compared to invested assets (Pillar3, and ETFs)
Pillar 3: VIAC and Finpension are cheaper, but Finpension doesn’t offer mortgages (yet!) and VIAC/WIR’s offer was materially worse: existing pledged pillar 3a assets in VIAC are considered at 60% of account balance (new rule starting Jan 1, 2026) → increasing cash downpayment, and 3 year SARON margin is 0.85% (non-negotiable).
Notes:
- Thanks to @Cortana and @MindfulCompounder for guidance and referral to the right person who understood what I wanted and delivered the above deal.
- Happy to connect you to my Relationship Manager (please DM).
- Talked to 7 different banks directly.
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Congratulations! 
That’s a scarily large mortgage. 
What does <33% affordability mean? Does it mean interest rates going up by 1.5% will take up 100% of take home pay?!
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Thanks.
I think it’s a number banks calculate comparing your annual salary to stress test (5%?) mortgage rates. Below 33% is all green lights.
People in forum have mortgages upto 40-44% affordability. Which shows how much banks are ready to accommodate.
It is a large mortgage, never expected to borrow so much, but also never expected to buy Swiss real estate. We would rather keep the assets invested.
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Congratulations, I think it a very good deal (we got something similar at a higher SARON of 0,8) but overall the mortgage setup it’s one of the best deals you can get/do today.
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I don’t know nothing about mortgage.
So your basic monthly non-3a (you would save into 3a anyway, wouldn’t you?) cost is 5484/12+1’140’000*0.65%/12 (saron being 0), that’s 1’074.5?
So 1KCHF for fixed fees and almost half of it is amortization.
With 60K capital invested, no withdrawal, liquid net worth available.
I should maybe reconsider RE, I’ve always considered my rent unbeatable. Maybe not. (Still not in love with all other aspects of RE mgmt).
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These are ‘bank’ costs. It is not a new build, but not very old either. Keep in mind the maintenance costs. Heating systems last 20 years and can cost between 35-50k CHF, Well insulated windows last 40-50 years, and replacement costs depend on how many you have 
Overall I expect the ‘financial’ returns to be positive over 20-25 years time frame. But that won’t make us rich.
And rates won’t stay 0. At the moment we pay 0.65%. A 10y fixed was at 1.54% when we signed our contract. We expect to a pay something below that averaged over our lifetime. Closer to /into retirement, we might be tempted to go for 5-10 year fixed terms (with much lower mortgage by selling parts of pillar 3a and pillar 2 withdrawals)
It’s a house to raise family and use it over the next 20-25 years. After that, who knows where we will be, if still alive.
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Congrats!
Deals like this are mind blowing to me.
0.65% SARON margin 
Effective downpayment 5%
I’m guessing the pledges could be about 5-10 years of contributions. Biggest barrier is combined income of > 280k CHF
The monthly costs to compare with renting: You’re “paying” at the moment 1700-1800 CHF/month (0.65% SARON + 1% maintenance cost + 4% opportunity cost on the 60k. Amortisation ignored) at the 2023 peak interest rates you would be paying 3400 CHF/month. It’s a no brainer if you see yourself living there > 10y. I wonder what would be the rent for such house in the area ?
My understanding was that the financing environment was bad these days. Looks like not. I suspect you are a bank employee ?
interest rate conditions are not as great compared to just before/after covid times.
i got a 0.75% mortgage fixed for 10 years! i’d be happy if I could renew at the same rate in a few years time!
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Congrats, that’s definitely a great rate, very hard to beat in the current market situation! Do you have any idea what your saron rate would have been at the time when you fixed your mortgage?
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Probably similar today. Given the fixed rates, I didn’t dwell on the LIBOR option for too long.
Unless the margin was less than 44 basis points, it would be impossible to beat the fixed rate even if rates remain 0% the rest of the term.
Computer analysis:
Period Days Rate Contribution 2020-01-01 → 2022-09-22 995 0.00% 0.00 2022-09-22 → 2022-12-15 84 0.50% 42.00 2022-12-15 → 2023-03-23 98 1.00% 98.00 2023-03-23 → 2023-06-22 91 1.50% 136.50 2023-06-22 → 2024-03-21 273 1.75% (peak) 477.75 2024-03-21 → 2024-06-20 91 1.50% 136.50 2024-06-20 → 2024-09-26 98 1.25% 122.50 2024-09-26 → 2024-12-12 77 1.00% 77.00 2024-12-12 → 2025-03-20 98 0.50% 49.00 2025-03-20 → 2025-06-19 91 0.25% 22.75 2025-06-19 → 2030-01-01 1,657 0.00% 0.00 Result
Time-Weighted Average Rate ≈ 0.3181%
The non-zero rate period lasted ~1,001 days (~2.7 years) out of 10 years, and even at peak it was only 1.75%, so the 10-year average comes out to roughly 32 basis points.
The non-zero period ran from 2022-09-22 → 2025-06-19 (1,001 days, ~2.74 years).
Time-Weighted Average for the non-zero period ≈ 1.1608%
So during the ~2 ¾ years rates were above zero, the average was about 116 basis points — bookended by the slow ramp-up (0.25→0.50→1.00…) and the symmetric cutting cycle back down, with the longest stretch (273 days) sitting at the 1.75% peak.
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