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Fixed Rate Mortgages in Switzerland: The Pros and Cons Explained

February 2, 2022 - Benjamin Manz

Get informed about the advantages and disadvantages of fixed-rate mortgages (FRMs) in Switzerland with this guide.


  • The interest rate of an FRM is fixed for the whole mortgage term. It does not get higher or lower during the term. This lets you calculate the exact cost of a mortgage in advance and plan your budget.
  • If market interest rates go up at some point during the mortgage term, you benefit because you keep your fixed lower interest rate. If, on the other hand, you used an adjustable-rate mortgage or a SARON mortgage, your interest rate could go up in keeping with market rates.
  • Many Swiss lenders let you lock in an interest rate before your mortgage actually begins. That means you can already fix the interest rate for your FRM before you actually need the mortgage. For example, you could lock in the interest rate for your next refinancing mortgage when interest rates are exceptionally low, before your existing mortgage expires.


  • Inflexibility: Both your interest rate and mortgage term are fixed. If market rates go down, you are stuck with your fixed, higher interest rate. If you want to amortize or refinance your mortgage before the end of the mortgage term, you may have to pay penalties. 

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Expert Benjamin Manz
Benjamin Manz is CEO of and an independent expert on banking and finance.
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