Current Mortgage Rates

The mortgage rate is a key element when purchasing real estate because it reflects the cost of credit. In other words, it determines the monthly payments over the entire term of the loan. But beyond the nominal rate, many parameters come into play, such as the type of mortgage, the term, market trends, and the borrower’s profile. Let’s decipher the ins and outs of Swiss mortgage rates to help you see things more clearly and make the best choices.

Comparison of Swiss mortgage rates

What is a mortgage rate and how is it calculated?

The mortgage interest rate corresponds to the annual cost of the property loan granted by the bank. It is a percentage that applies to the borrowed capital and, along with the repayment term, determines the amount of the installments.

The main component of the total cost of a mortgage, the interest rate is not fixed once and for all. It varies constantly depending on:

• Monetary policy of the Swiss National Bank (SNB)
• Inflation
• The health of the economy
• Refinancing conditions for credit institutions

Added to this are factors more specific to each file, such as the quality of the borrower, the size of their personal contribution, the amount and duration of the loan, or the rank of the mortgage. These are all parameters that explain the great variability of the rates offered on the market.

What are the current mortgage rates?

At the start of 2025, Swiss mortgage rates are at relatively low levels, despite a slight rebound that began in 2022. However, the differences remain significant depending on the rate model (fixed, variable, Saron), the time horizon, the banks’ requirements, and the location of the property.

According to the scale of our partner Swiss Life, one of the major players in the sector, the most attractive rates are currently:

• 1.45% for a 5-year fixed rate
• 1.62% for a 10-year fixed rate
• 3-month SARON rate + 0.80% margin for variable-rate financing

These are indicative levels, conditions that a good broker can improve by up to 0.5% by preparing a solid file and putting the banks in competition.

Economic Factors That Influence Mortgage Rates

The SNB’s key interest rate serves as a guiding principle. When the issuing institution raises it to curb inflation and slow overheating, mortgage rates automatically follow suit, with an immediate impact on variable-rate mortgages.

At the same time, banks are passing on their rising refinancing costs to the rates of new and renewed mortgages. This trend is accentuated when inflation spikes and the economy is operating at full capacity. Conversely, a slowdown in the economy and gloomy growth expectations encourage banks to exercise caution and moderate interest rates.

The different types of mortgage rates in Switzerland

Fixed interest rates

Popular with nearly 80% of borrowers in Switzerland, the fixed-rate mortgage is appealing because of its clarity. As its name suggests, the interest rate is fixed for a specific period, generally between 1 and 25 years.

Main drawback: impossible to benefit from a possible rate drop along the way. A long-term fixed rate, however, provides effective protection in the event of a sharp rise. Not to mention that the longer the time horizon, the higher the rate, as banks hedge against the risk of fluctuations.

SARON Referenced Mortgage Rates

Available since late 2017, SARON-indexed mortgages are attracting growing interest. This acronym stands for the new Swiss franc interbank reference rate, which will gradually replace Libor.

Determined daily based on transactions concluded on the money market, SARON (Swiss Average Rate Overnight) reflects the real cost at which banks lend to each other on a day-to-day basis. This mechanism is intended to be more transparent and representative than Libor, which is based on declared quotes.

In concrete terms, banks offer the Saron mortgage with a rate recalculated quarterly. This includes an average of the SARON over 1 or 3 months (currently close to 0%), plus a margin specific to each institution. The advantage? A more advantageous yield curve than a fixed-rate loan, as the Saron rate moves more closely to the SNB’s monetary policy.

The downside? Quarterly fluctuations make budget forecasting more difficult. And beware of the ratchet effect in the event of a sharp rise in short-term rates! The Saron mortgage is therefore aimed at borrowers comfortable with risk and willing to embrace variability to generate financial gain.

Currently, Swiss Life offers a 3-month Saron rate + margin of 0.80%, reduced to 0.70% for a green mortgage.

Variable mortgage rates

The object of all fantasies in the 1980s due to their unbeatable price, variable-rate mortgages have lost their luster. And for good reason: the interest rate fluctuates freely according to the bank’s commercial policy, generally linked to its refinancing costs. An opaque mechanism that exposes the borrower to sudden surges in monthly payments.

The only safeguard: the variable rate can only be adjusted at regular intervals (in principle every quarter) and not at random. However, this is insufficient to protect against a sudden reversal of the trend, as in 1989-1990, when some rates jumped by 5 to 8% in a few months!

These peaks are fortunately over, with variable rates currently fluctuating between 2.75% (1st place) and 3.25% (2nd place) at Swiss Life. These are not insignificant levels, but should be considered with caution given the expected rise in rates over the next few years.

“Green” mortgages

Riding the wave of the energy transition, major banks have expanded their offerings of “green” mortgages. This term is reserved for properties with high energy performance (Minergie label, comprehensive thermal renovation), with the efforts made being rewarded with a discount on the interest rate.

Depending on the institution and the model chosen, the “green bonus” varies between 0.10% and 0.20% compared to a traditional mortgage.

• 0.15 points on fixed rates
• 0.10 points on Saron rates

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Evolution of mortgage rates

After a decade of historically low rates, the Swiss mortgage market has experienced a soft landing since 2022. Under the effect of inflation and the SNB’s rise in interest rates, long-term rates (fixed 10 years and over) have crossed the 2% mark, while Saron rates have risen to around 1%

According to the consensus of economists, this normalization should continue gradually until 2025-2026, before rates stabilize. The upward trend will be all the more pronounced as the SNB steps up its monetary tightening to bring inflation back towards its 1% target, as economic growth remains dynamic with pressures on prices and wages, and as banks see their refinancing conditions tighten on the markets

However, there’s no rush to expect, as there was during the bond crises of 1994 or 2022. The guardians of financial stability have learned the lessons of the past and have strengthened tools to contain excesses. This should reassure potential homeowners embarking on this uncertain period.

Legal Aspects of Mortgage Rates in Switzerland

The Federal Framework Governing Mortgage Rates

In Switzerland, there is no strict federal regulation on mortgage rates. Each institution remains free to set its own pricing structure, adapting to the market and its credit policy.

However, the legal framework is not non-existent: several laws and ordinances govern the granting of mortgage loans to prevent household over-indebtedness and systemic risks. The safeguards in force include:

• Mandatory personal contribution of 20%, including at least 10% in cash (excluding the 2nd pillar)
• Mortgage capped at 80% of the value of the pledged property
• Theoretical obligation to repay the loan in full within 15 years
• Financial burden limited to 33% of income (up to 40% with the 2nd pillar)

Mortgage Contracts

Beyond the “technical” aspects such as the amount, rate, and term, mortgage contracts contain numerous clauses that appear innocuous but have far-reaching consequences in practice.

Examples of common stipulations to examine closely:

• The obligation to occupy the property as a primary residence
• The prohibition on transferring or subletting the property without prior agreement
• The possibility of terminating the mortgage early in the event of default
• The charging of late payment interest of between 5 and 6% in the event of non-payment
• The allocation of partial payments as interest
• The collection of application, guarantee, and management fees
• Compensation in the event of early repayment of a fixed-rate loan

Our tips for getting the best Swiss mortgage rate

What are the criteria for getting a favorable rate?

To attract banks and secure the most competitive rate, the key ingredient is an impeccable borrower profile with a comfortable and regular income (permanent contract, self-employed), a healthy financial situation, a limited debt ratio, and a coherent real estate project.

But to really make a difference, other assets are essential such as:

• A significant down payment, preferably above the regulatory 20%
• Savings available after purchase to cover unforeseen expenses
• A high-quality property in a sought-after location with strong potential
• A strong banking relationship with additional assets
• Subscription to loan insurance covering death and disability
• An upstream approach (6-12 months) to anticipate financing needs

Negotiation Strategies with Banks

Systematically compare banks

In other words, by preparing at least three indicative offers based on a standardized application. This provides an informative comparison to highlight the differences and negotiate the best proposal!

Highlight Your Assets and Overall Situation

Highlight the strengths of your profile to your contact. Length of relationship, ownership of other products (savings, life insurance, investments), professional stability, quality of the property, solid guarantees, etc. These are all arguments to put forward to obtain a goodwill gesture. Similarly, offering to transfer all of your cash flows (salary, rent, savings) to the lending institution is a positive signal in the eyes of credit analysts.

Use a specialized broker

In addition to their market expertise, a mortgage broker has increased negotiating power with banks, with which they handle large volumes. A major advantage for securing the best terms without incurring liability!

The conditions for benefiting from a rate reduction

In certain specific situations, banks are sometimes willing to offer a discount on the standard rate. This is particularly the case when taking out loan insurance covering death and disability, a reassuring guarantee for the lender.

Similarly, the domiciliation of income and main banking flows (rent, savings, investments) allows for the acquisition of dedicated “package”-type conditions, in return for a commitment of loyalty and exclusivity. This logic also applies to certain low-risk profiles such as doctors, civil servants, or notaries.

Borrowers financing a large amount (over one million francs) are also in a strong negotiating position, as banks are more accommodating on projects generating a significant margin. Not to mention buyers of a new property (VEFA) guaranteed by the bank, which is less risky than a private sale. Likewise, opting for a property that meets the latest energy standards—or committing to comprehensive thermal renovation work—opens the way to subsidized “green mortgages.”

Impact of the interest rate term on the overall cost of the loan

The choice of term has a major impact on the total cost of the loan and the repayment burden. Here are some numerical examples, based on the latest Swiss Life rates for a CHF 500,000 mortgage:

Term	Fixed Rate	Total Interest Cost
5 years	1,45%	36’250 CHF
10 years	1,62%	81’000 CHF
15 years	1,80%	135’000 CHF

We observe that a fixed rate over 15 years costs almost CHF 100,000 more than over 5 years! A significant additional cost which can be explained by the risk premium integrated by the bank over long periods.

However, the choice should not be limited solely to mathematical criteria: a short-term rate is certainly less expensive, but it exposes you to the risk of unfavorable renewal in the event of a sharp rise in interest rates at maturity. Conversely, a long-term rate provides welcome security in a volatile environment, even if it means paying more for this insurance.

In practice, the ideal is often to segment your financing, for example, with one-third of a 5-year fixed rate and two-thirds of a 10-year fixed rate.

To help you plan ahead, our mortgage calculator performs all these calculations for you. It is based on the main criteria analyzed by lending institutions (amount, rate, term, amortization, income, contribution, debt) – from this data, our algorithm precisely calculates your monthly mortgage payments, including interest and amortization, the total cost of your loan over the term, distinguishing between principal and interest, the evolution of your debt over the years, as well as your maximum financial capacity based on debt standards.

Tips for finding the right balance between term and interest rate

The property’s holding horizon and intended use

Is this a long-term purchase or a temporary solution? Are you considering a resale or early repayment in the medium term? Financing must be aligned with these deadlines to avoid any blind spots.

Ease of living and savings capacity

They also come into play: the greater the amortization effort, the more you can secure your rate over time. Conversely, a tight budget is more likely to favor a short-term loan, even if it means taking a risk on the evolution of mortgage rates.

Risk sensitivity

In other words, the need for visibility. This is crucial: some people don’t tolerate uncertainty well and are willing to pay the price for peace of mind. Others, more speculative, are betting on persistently low rates. Everyone must find their own balance!

Present and future trends in interest rates

In a monetary tightening cycle like the current one, it may be wise to protect yourself with long maturities. Conversely, in a period of monetary easing, you may opt for short-term loans to take advantage of the decline. Finally, the quest for flexibility can also guide your thinking: some institutions (such as UBS or Crédit Suisse) offer hybrid formulas with renewable fixed rates or early repayment terms. This is an option worth exploring to avoid becoming locked into an overly rigid framework.

The art of the right mix is ​​a matter of dosage and balance: our experts are here to help you find the perfect solution for your profile.

Get your mortgage at the best current rate!

As you can see, mortgage rates are a complex and evolving subject that requires personalized support to make the right choices at the right time. If you’re considering a property acquisition, our team of financing specialists is available to provide a personalized and independent assessment. On the agenda:

• In-depth analysis of your situation and borrowing capacity
• Informed advice on the most appropriate interest rate and term strategy
• Preparation of a compelling and credible financing application
• Competitive bidding among our network of banking partners
• Negotiation of the best terms and the most attractive rate
• Personalized support until funds are released at the notary’s office

Our added value? Save time and money, give you maximum peace of mind, and get your project completed at the best price! So don’t wait any longer and contact us to schedule an appointment with a mortgage broker. Our services are free and without obligation, giving you the opportunity to lay the foundations for your real estate success.