09.01.2025 – 00:30
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Press release
Comparis Mortgage Barometer for the fourth quarter of 2024
Despite falling interest rates, strong demand for fixed mortgages with long maturities remains unchanged
As expected, the Swiss National Bank (SNB) lowered its key rate in December. However, the level of the cut surprised: the SNB halved the key rate from 1% to 0.5%. As a result, Saron mortgages are considerably cheaper and are now only more expensive compared to medium-term fixed rate mortgages. After this further drop, average rates for 10-year fixed mortgages were around 1.1 to 1.7%, while those for Saron mortgages were around 1.1 to 1.6%. 5-year fixed rate mortgages trade between 1.0 and 1.5%. However, long-term fixed-rate mortgages were still in high demand in the fourth quarter. “4 out of 5 mortgage takers have opted for long-term fixed rate mortgages. In addition to high planning security, attractive conditions should have contributed to this decision,” says Dirk Renkert, money expert at Comparis.
Zurich, January 9, 2025 – As expected, the Swiss National Bank (SNB) lowered its key rate in December. However, the level of the cut surprised: the SNB halved the key rate from 1% to 0.5%. This was the fourth consecutive reduction in key rates. At the start of the year, the key rate still stood at 1.75%. In its rate cut cycle, the SNB is far ahead of the European Central Bank (ECB) and the US Federal Reserve (Fed), which have both reduced their key rates by 0.25 percentage points, by 3% and respectively. from 4.25 to 4.50%. While the euro zone is suffering from the economic weakness of large member countries such as Germany, the American economy is proving very robust. Interest rate policy essentially depends on the evolution of inflation. While inflation in Switzerland has been well below 1% for months, it has recently increased slightly in the eurozone and the United States and is above the 2% target. “In its interest rate decision, the Fed signaled that inflation was more persistent than originally expected. It is also unclear how the customs policy announced by the new government will affect prices. Therefore, it announced a more cautious approach in rate cuts next year. The US dollar has therefore appreciated somewhat again against the franc,” comments Dirk Renkert, Money expert at Comparis.
The increase in interest rates by the SNB weakens the Swiss franc.
“With its decision to lower the key rate by 0.5 percentage points to 0.5%, the SNB has given a clear signal,” continues Mr. Renkert. The SNB sees the greatest danger for economic development in prices that are too low. Consumers may be reluctant to make purchasing decisions while waiting for prices to fall further, resulting in a loss of revenue for the companies involved. “The low inflation is mainly due to the strong franc and falling energy prices,” says the Comparis finance expert. In addition, it is expected that the already announced electricity price reductions of 10% on average and the fall in mortgage rates will lead to an easing of existing rent levels and thus a fall in inflation.
“A strong franc is both a blessing and a curse for the SNB – while a strong franc helps combat high inflation, by reducing the prices of imported goods, it is seen as a disadvantage in times of low inflation . It almost seems that the SNB wants to break the strength of the franc at all costs by lowering rates,” said Mr. Renkert.
Fixed rate mortgages continue to fall
Expecting interest rates to fall further, fixed-rate mortgages also became cheaper in the fourth quarter. The reference interest rates (called indicative rates) published by more than 30 credit institutions for 10-year fixed mortgages amounted to 1.63% (as of December 31), or 0.18 percentage points of less than at the end of September (1.81%). The indicative rate for five-year fixed mortgages stood at 1.44% (as of December 31) and 0.24 percentage points lower than at the end of September (1.68%).
At the start of 2024, the indicative rates for ten- and five-year fixed-rate mortgages were 2.26% and 2.12%, respectively, 0.63 percentage points and 0.68 percentage points higher than at end of December. The yield on 10-year federal bonds stood at 0.32% at the end of December, 0.34 percentage points lower than at the start of the year (0.66%).
Mid-term fixed-rate mortgages still cheaper than Saron mortgages
Saron mortgages fell by around 1.25 percentage points this year after the 4 key rate cuts. So, they are still more expensive than mid-term fixed-rate mortgages, but slightly less expensive than 10-year fixed-rate mortgages. In December, the margins negotiated were as follows: Saron first mortgages cost on average between 1.1 and 1.6%, 5-year fixed rate mortgages between 1.0 and 1.5%, and mortgages at 10-year fixed rate trading between 1.1 and 1.7%.
“With the 0.5 percentage point increase in rates, Saron mortgages have become significantly cheaper. Indicative rates for fixed-rate mortgages had already fallen earlier, but not as sharply. However, fixed rate mortgages remain very attractive. They are ideal for people looking for planning security at attractive conditions. For those who are able to bear the risk of a change in interest rates and who believe that the decline in rates will continue, Saron mortgages are probably more suitable,” believes Mr. Renkert.
Share of long-term fixed rate mortgages of almost 80%
HypoPlus, Comparis’ mortgage partner, shows a consistent preference for fixed mortgages with long maturities. Thus, in the fourth quarter, approximately 77% of all mortgage holders opted for a fixed-rate mortgage with a term of 10 years or more. In the previous quarter, this proportion was already around 70%, while it was only 40 to 50% in the first two quarters of the year.
For medium maturities (4 to 6 years), the share of transactions remained only slightly lower (around 11%) compared to the previous quarter (around 14%). For comparison, this share was still around 30% in the second quarter. The share of mortgages with a maturity of up to three years (including Saron mortgages) remained virtually unchanged at 7% compared to the third quarter. About 4% were Saron mortgages.
“4 out of 5 mortgage takers have opted for long-term fixed rate mortgages. In addition to high planning security, attractive conditions should have contributed to this decision,” says Renkert.
Significant savings potential during negotiation
Comparis compared the average differences between the indicative rate and the best rate obtained by HypoPlus for mortgages over 3, 5, 10 and 15 years as of December 31 and calculated the – considerable – savings potential over the life of the mortgage. .
The indicative rates calculated by Comparis and presented here are the average rates before negotiation published by more than 30 mortgage establishments. The contracts actually negotiated by HypoPlus are significantly lower: the best rate negotiated for a ten-year fixed mortgage is 1.15% (status: 12/31/2024). The indicative rate is 1.63%.
Database
HypoPlus
Comparis’ mortgage partner, provides interest rates for the Comparis Mortgage Barometer. This data is based on the indicative rates of around 30 credit institutions, which are updated daily and published in the
preview
rates. Experience shows that, in most cases, the rates indicated in mortgage offers are lower than the official guideline rates. The next
Mortgage Barometer
will be published in April 2025.
To find out more:
Dirk Renkert Expert Argent Téléphone: 044 360 53 91 E-mail: [email protected] comparis.ch/hypoPlus
About comparis.ch
With more than 80 million visits per year, comparis.ch is one of the most visited websites in Switzerland. The company compares the prices and services of health funds, insurance companies, banks and telecom operators. It also presents the largest online offering in Switzerland for automobiles and real estate. With its detailed comparisons and in-depth analyses, it contributes to more transparency in the market. comparis.ch thus strengthens the expertise of consumers in decision-making. The company was founded in 1996 by economist Richard Eisler. This is a private company. Even today, Comparis is majority owned by its founder. No other company or the State holds any stake in Comparis.
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