Over the first half of 2019, mortgage interest rates moved steadily in one direction: downwards. Interest rates reached a historical low at the end of August 2019. At that point, the average annual interest rate was just 0.92% for 5-year FRMs and 1.01% for 10-year FRMs.
Since then, interest rates have climbed to an average of 0.96% for 5-year FRMs and 1.12% for 10-year FRMs.
Some lenders charge twice as much
The gap between the lowest and highest offered annual mortgage interest rates widened somewhat since the beginning of the year. Advertised annual interest rates for 10-year FRMs range between 0.75% with the most-favorable offer and 1.4% with the least-favorable offer.
Advertised interest rates for 5-year FRMs range between 0.58% per annum with the most affordable offer and 1.25% with the least-affordable offer. That means you could pay twice as much for the same mortgage depending on which lender you work with.
“Differences in mortgage interest rates charged by different lenders are so big that comparing mortgage offers is essential,” states moneyland.ch analyst Felix Oeschger. In practice, choosing the right mortgage has a bigger effect on mortgage costs than choosing the optimal time to get a mortgage.
Mortgages from banks and insurance companies compared
The current average annual interest rate for 10-year FRMs from insurance companies is 0.99%. The current average annual interest rate for 10-year FRMs from banks is 1.14%. The current average annual interest rate for 10-year FRMs for online-only mortgage offers is 0.92%.
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