Geldcast update: Mortgages in Switzerland are becoming massively more expensive

Fabio Peng

Interest rates for mortgages in Switzerland have almost tripled since the beginning of the year. If you want to build something or you need to renew your mortgage, you have to decide between a fixed-rate and a SARON (Swiss Average Rate Overnight) mortgage. Which is more worthwhile?

Interest rates for ten-year fixed-rate mortgages in Switzerland have risen from an average of just over 1% at the beginning of the year to well over 3%. SARON mortgages are somewhat cheaper, but there is an interest rate risk. One thing is certain: buying a house in Switzerland has become noticeably more expensive.

The higher interest rates are not only felt by buyers, but also by people who took out a mortgage years ago and now have to renew it. We therefore spoke to two client advisers from regional banks and asked them what they currently recommend: a fixed-rate mortgage or a somewhat riskier SARON mortgage with a variable interest rate?

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Author Fabio Canetg completed his doctorate in monetary policy at the University of Bern and the Toulouse School of Economics. Today he is a lecturer at the University of Bern.

As a journalist, he works for SRF Arena, Republik Magazin and SWI swissinfo.ch. He hosts the monetary policy podcast “Geldcast”.