Hanspeter Rhyner has held management positions at the Glarner Kantonalbank (GLKB) since 2009, and became the bank’s CEO in 2013.
Today’s ongoing low interest rate phenomenon is a historical first. How are you, as a home loan provider, dealing with the situation?
Hanspeter Rhyner: The low and negative interest rate environment of the past few years has been a boon to the mortgage sector. Many customers are seizing the moment and using the low interest rates to fulfill their dream of owning a home. For banks, the situation demands active asset liability management in order to stay ahead of the risk of rate changes.
What advice would you offer to interested parties who are looking at a one, five or ten year time-frame?
The choice of mortgage term depends on the client’s preferences. If they want to benefit from the lowest possible interest rate, they should choose a short mortgage term. If they prefer more security, a long-term mortgage is the better choice. In many cases, dividing mortgages into a combination of short and long tranches is recommendable because doing so allows for optimal flexibility and planning.
You have recently added 20-year mortgage terms to your catalog. Previously, mortgages with such long terms have been offered primarily by insurance companies. What drove your decision to add this product?
Longer mortgage terms allow our customers to benefit from even greater security – and they also pay off financially: by taking advantage of these offers, mortgagors can secure the current prime mortgage conditions over longer terms. The strong demand we have seen in the long-term mortgage sector convinced us that the newly-launched product fulfills a customer need.
A long mortgage term has the disadvantage of binding the mortgagor to the mortgage contract for a long period of time. What happens when a customer chooses to opt out of a long-term mortgage?
The Glarner Kantonalbank charges a low, flat-rate fee of 1000 francs for early terminations. If a mortgagor sells their home during the mortgage term, they can pay the fee and terminate the mortgage – regardless of where they stand in their mortgage term. To our knowledge, that option is unique among Swiss lenders, and allows homeowners to profit from long-term security and favorable conditions with a clearly foreseeable amount of risk.
You launched the online mortgage service Hypomat in 2012. What is your verdict on its performance so far?
Since the launch of Hypomat, we have been able to gather valuable knowledge related to issuing mortgages online, and our experience has been positive from start to finish. We now pass our expertise on to our licensees – the Banque Cantonale de Fribourg and BancaStato – which have successfully implemented our online mortgage software.
The online mortgage market is growing. Where do you see the market share of Swiss online mortgages in the future? Will mortgaging homes online soon become the new norm?
According to our predictions, that probably will not be the case. Online mortgages are suited to customers who prefer to handle their financial affairs themselves, but a large number of customers will continue to seek the know-how and oversight offered by customer service representatives.
The Glarner Kantonalbank is a leader in the adoption of fintech. What, in your opinion, are the most exciting trends in the field of online mortgages?
What I can tell you is that fully online mortgages are not far away. Many of the parties involved – including land registries, notaries and debt collection offices – are busy digitizing their services. Along with current developments in the creation of digital identities, these changes will soon allow for the option of completely digital banking.
January 6, 2017