Mortgage interest rate fixed or variable?

My wife and I want to buy a property (single-family home). We want a fixed rate mortgage (10 or 15 years) like those offered by Bank Coop. Here is the question:

If the interest rate is 1.19%, will that rate stay the same throughout the entire mortgage term (10 or 15 years in this case)? The information we received from Bank Coop seems to indicate that the rate can climb by as much as 4.5% during the mortgage term. That would mean that the rate is not fixed. Did we misunderstand something?

Hi there,

The 4.5% rate is not the actual interest rate you will pay, but an imputed interest rate used for calculating mortgage affordability.

When you get a fixed rate mortgage, the interest rate (in your case 1.19% per annum) remains the same throughout the specified term.

Once the fixed rate mortgage term (5 years or 10 years, for example) is complete, you will get the interest rate which applies at the time. This may be higher or lower than your fixed rate depending on how interest rates develop.

You are free to switch to a different mortgage at the end of your fixed mortgage term without paying any penalties. If you terminate you fixed mortgage before the mortgage term is complete, you will usually have to pay penalty charges.

If you expect interest rates to climb in the future and want to minimize the risk of getting hit with high interest rates, a fixed mortgage with a long term (15 years, for example) might work well for you. Just note that the longer the fixed term you choose, the higher the interest rate will be.

Mortgage rates shown on moneyland.ch are updated daily. You can compare all advertised rates using the comprehensive Swiss mortgage comparison to get a clear overview of current interest rates.

Best regards from Moneyguru

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