Mortgage Interest Rate

Mortgage interest is money which you pay a lender in exchange for a mortgage loan when you mortgage a property.

Mortgage rates are calculated as a percentage of the total mortgage.

The annual mortgage interest rate, or mortgage rate, provides a clear indicator of the amount of interest you will pay, and is typically shown as a percentage. However, the interest calculation method, or so-called day-count convention, used by the lender also plays a role in determining how much interest you will pay over the life of your mortgage.

The final mortgage interest rate you get depends on the following factors:

  • Mortgage type (fixed rate mortgage, variable mortgage or LIBOR-based mortgage).
  • National and international economic climate (particularly where interest rates are concerned).
  • Lender (bank or insurance company).
  • Product (so-called «online mortgages» normally offer the best value).
     
  • The creditworthiness and debts of the mortgagee as shown by loan-to-value and the affordability ratios (interest rates are higher for those with poor credit or a high amount of debt in relation to their income).
     
  • The property’s material condition.

More information:
Swiss mortgage rates compared
What is a loan-to-value ratio?
What is a second mortgage?
Indirect Amortization - simply explained
Amortization - simply explained

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