Swiss mortgage interest rates have, as a whole, become higher across all mortgage terms. On January 1, 2021, the cost of fixed-rate mortgages (FRMs) tracked by the moneyland.ch Swiss mortgage index still sat at 0.95 percent (5-year FRMs), 1.10 percent (10-year FRMs), and 1.29 percent (15-year FRMs).
Mortgage interest got more expensive in 2021
By December 31, 2021, the average annual interest rates were 1.01 percent (5-year FRMs), 1.25 percent (10-year FRMs), and 1.51 percent (15-year FRMs). That means interest rates went up by 0.06 percent (5-year FRMs), 0.15 percent (10-year FRMs), and 0.22 percent (15-year FRMs) respectively.
Mortgage interest rates in 2022
On January 4, 2022, annual interest rates averaged 1.02 percent for 5-year FRMs, 1.28 percent for 10-year FRMs, and 1.54 percent for 15-year FRMs. That means interest rates have gone up since the start of the new year.
Steeper interest curve
The interest curve of Swiss fixed-rate mortgages has also climbed since the start of 2021. In simpler terms, that means the premium you pay for longer mortgage terms in comparison to shorter terms has gotten slightly larger. At the start of 2021, the average annual cost difference between fixed-rate mortgages with 2-year and 15-year terms was 0.37 percentage points. In the meantime, that markup has climbed to 0.60 percentage points. “This indicates that banks expect mortgage interest rates to go up,” explains moneyland.ch analyst Felix Oeschger.
Outlook: Interest hikes probable
The high inflation rates have led some central banks to signal that they may raise their interest rates. Although the Swiss National Bank (SNB) has not, as of yet, given such a signal, most market observers expect interest rates on the whole to trend upwards this year. So far, developments seem to confirm that assumption. “It is quite possible that we will never reach the historically-low mortgage interest rates of August 2019 again,” says Felix Oeschger.
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