Mortgage: rate trends and predictions

The current most attractive mortgage interest rates.

Saron mortgage from*

0.65%

Fixed-rate 10 years from

1.37%

Fixed-rate 5 years from

1.03%

* The value shown here for a SARON mortgage is made up of the current SARON (Swiss Average Rate Overnight) and the individual margin of the mortgage lender. Generally speaking, the interest rates shown are the best conditions currently available. Your personal interest rate may differ based on the loan-to-value ratio, affordability, mortgage volume and location of the property.

Mortgage rate trends in Switzerland.

Mortgage interest rates fell by over 30 basis points (bps) in the second quarter of 2025. The increase of the first quarter has therefore been cancelled out. Current interest rates are already very close to last year’s low point. Interest on medium-term mortgages has eased the most. Due to America’s hawkish tariff policies, markets are bracing for a slowdown in global economic growth and investors are fleeing to the Swiss franc as a safe haven. Since April 2025, the Swiss franc has appreciated in value dramatically against dollar, depressing interest rates in Switzerland.

Mortgage rate predictions to the end of 2025.

The vacillations in interest rates in the first and second quarters are reflective of great uncertainty regarding how rate trends are likely to continue. The current situation is like a rollercoaster ride: unanticipated twists could come our way at any moment. If markets anticipate that rates will decline from their present state to negative levels between now and the end of the year, the situation could look a lot different within just a few weeks. But for the time being, swap rates – which are negative for terms of up to five years – do not indicate an imminent reversal of the downward trend, meaning that there is still further potential for reductions until the end of the year, particularly for short and medium mortgage terms.

Note: Predictions regarding future rate trends are highly complex, so should always be regarded as an estimate as opposed to a precise indicator.

Recommendations

If you missed the historically low rates of late 2024, you now have a second chance to secure very attractive mortgage conditions. Fixed-rate mortgages with medium terms in particular are currently highly attractive and still offer good protection against abrupt increases in rates.
Competition among lenders has recently increased, which looks set to strengthen the hand of mortgage borrowers in negotiations. Nevertheless, it is still essential to carry out a wide-ranging comparison of lenders to find a good offer that is right for you, especially in the current tense situation where lenders are significantly more choosy.
Following the most recent cuts to the base rate, SARON mortgages are at rock bottom. Due to the great uncertainty of the present climate, do not opt for a money market mortgage without careful consideration and, if in doubt, err on the side of a slightly more expensive variant of a fixed-term mortgage that offers more certainty.
As well as offering attractive conditions, you should choose a mortgage product that will always meet your current and future financial needs. This also includes its long-term affordability, any renovations you are planning to carry out and your pension provisions.

Your questions. Our answers.

What influences mortgage rate trends?

Mortgage rates in Switzerland are significantly influenced by the monetary policy of the Swiss National Bank (SNB). It sets an inflation target and the key interest rate. Other important factors include economic trends at home and abroad. The wider economy, expectations about inflation and unemployment rates play an important role here. Mortgage rates in Switzerland are also influenced by the international interest rate environment and capital flows, as well as the domestic property market.

What determines the price of a mortgage?

Basically, the price of a mortgage is determined by refinancing costs, administrative costs, the risk premium and the profit margin. The first two factors cannot be influenced, while you, the borrower, can influence the last two factors mentioned. You need to be capable of skilful negotiation and know what level of risk you present as a borrower. Keeping things low, in terms of affordability and the loan-to-value ratio, will help you reduce your risk. You will also be rewarded for taking out a mortgage for a large amount or having other products and services, such as accounts or savings products, with the provider.

What is the imputed interest rate?

The imputed interest rate refers to the interest rate for calculating affordability when a mortgage is to be issued. Since 2012, financing institutions have undertaken, through a form of self-regulation, to tighten the requirements for issuing mortgages and to use a notional interest rate of 5% for the purposes of calculating affordability. In doing so, they want to ensure that property buyers do not overextend themselves financially.

What kind of mortgage makes most sense at the moment?

It is not really possible to give an answer that applies across the board, as an individual customer’s situation is the decisive factor when it comes to choosing the right mortgage. Professional, independent advice is important for anyone looking to make a long-term decision on financing that reflects their tolerance and appetite for risk.