Swiss mortgage rates in free fall: the summer of saving

Basel, 8 August 2024

Favourable financing thanks to global interest rate cuts

The summer of 2024 brings good news for home buyers and property owners in Switzerland: mortgage interest rates continue to fall and offer unique opportunities for favourable financing. A recent survey of 15 mortgage providers shows that interest rates have fallen significantly again in the last two weeks. The decline in ten-year mortgages is particularly striking, with the average interest rate now back below 2%. Mortgages are currently available at favourable rates again.

Since the Swiss National Bank (SNB) cut interest rates in June of this year, mortgage rates have been falling continuously. This downward trend applies to all maturities: Two-year mortgages can now be had for an average of 1.82%, three-year and five-year mortgages for 1.80% each. The decline in ten-year mortgages is particularly notable, with the average interest rate now at 1.91% – a level last seen in March 2022. A mortgage comparison is worthwhile.

Further interest rate cuts in sight
The development of Swiss mortgage rates is largely determined by the Saron swap rates, which reflect the banks’ refinancing costs. These are generally based on the yields of federal bonds and have developed in line with the global interest rate cuts since June.

Some investors had not expected the SNB’s interest rate cut in June, which initially contributed to falling interest rates. However, many investors now expect further interest rate cuts in the coming years. Expectations for this year have fallen particularly sharply: many assume that the SNB will lower the key interest rate from the current 1.25% to 0.75%.

If the global economic outlook continues to deteriorate, further interest rate cuts are likely. In particular, the recent interest rate cuts in the USA and the eurozone have already had an impact on the Swiss interest rate landscape.

Take the opportunity and compare your mortgage with us free of charge!