After a short-lived climb, Swiss mortgage interest rates are sinking again. On July 14, 2021, the mortgage index from moneyland.ch showed average interest rates of 0.95 percent for 5-year fixed-rate mortgages (FRMs), 1.17 percent for 10-year FRMs, and 1.46 percent for 15-year FRMs.
Mortgage interest rates are once again below the average for 2021. The cost of 5-year FRMs now sits near the historical low of August 2019, while the average interest rates of 10-year FRMs are the lowest they have been since mid-February, 2021.
At the start of 2021, 5-year fixed rate mortgages sat at 0.95 percent per annum, while 10-year FRMs averaged 1.10 percent. Mortgage interest rates climbed sharply from February until the beginning of March, 2021. They peaked on March 1, 2021, with 5-year FRMs averaging 1 percent per annum, and 10-year FRMs averaging 1.28 percent per annum.
Fixed-rate mortgages have become cheaper again
“The drop in the average interest rates of fixed-rate mortgages is likely connected to the reduction in concerns about possible inflation,” says moneyland.ch analyst Felix Oeschger.
Whether or not this year will see FRMs with long terms become as cheap as they were in March 2020 remains to be seen. At the start of the coronavirus crisis in March 2020, mortgage interest rates nearly matched the historical low of August 2019. The cost of a 5-year FRM averaged 0.94 percent, while that of a 10-year mortgage averaged 1.02 percent.
Where will rates go from here?
“moneyland.ch expects interest rates to remain low over the coming months,” says moneyland.ch CEO Benjamin Manz. But depending on how the economy develops, the possibility of rates climbing cannot be ruled out.
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