According to Comparis, four out of five customers favor long-term fixed-rate mortgages to finance their property. A trend which has become more pronounced in recent years, even though the option is not the most financially attractive.
With the recent reduction in key rates from the Swiss National Bank (SNB), borrowing has become less expensive. If future owners seize this opportunity, they especially favor predictability, shows a barometer from the Comparis online comparator.
Rather than opting for the cheapest products, they overwhelmingly choose the safest solution: very long-term fixed mortgages, i.e. 10 years in principle.
Better predictability
This trend is particularly evident at the Banque cantonale vaudoise (BCV). According to David Michaud, real estate specialist at the institution, it is primarily explained by the situation on the financial market. “The Saron rate (formerly called Libor, this rate is indexed directly to key rates, editor’s note) is currently a little more expensive than medium-term fixed rates, less than five years,” he explains in La Matinale de la RTS.
The increase in long-term fixed mortgages is also linked to the notion of predictability, continues the expert. “There is a five or ten year fixed rate which allows the cost of the mortgage charge to be fixed over the long term, while a Saron rate is less predictable and likely to fluctuate over time.”
An unknown rate
Despite fluctuations, the Saron rate has been more financially attractive for two decades, according to several real estate experts.
These mortgages, which only constitute 10 to 15% of the market in Switzerland, are however little known to customers and not necessarily favored by banks, who fear seeing their customers flee overnight to the competition, as these mortgages are not not blocked for a specific period.
Sylvie Belzer/again
Swiss
Related News :