Banking News

Mortgage Interest Rates in Free Fall

July 10, 2019 - Benjamin Manz

The mortgage index shows a constant drop in average interest rates for Swiss mortgages since October 2018. On July 9, 2019, Swiss mortgage interest rates showed new lows of 0.96% for 5-year and 1.08% for 10-year fixed-rate mortgages (FRMs). That means interest rates for 5-year FRMs dropped by 20% and rates for 10-year FRMs dropped by 35% over the past 9 months.

On October 15, 2018, the average guide interest rate for 5-year FRMs was 1.19%. Since then, the average interest rate has gone down by 0.23 percentage points to 0.96% on July 9, 2019.

The average interest rate for 10-year FRMs went down by 0.62 percentage points to 1.08% over the same period. “That equates to a 35% drop since mid-October 2018,” states analyst Felix Oeschger.

All-time low for fixed-rate mortgages

The mortgage index shows that short-term FRMs and FRMs with exceptionally long terms are currently at all-time lows.

The average interest rate for 2-year FRMs is currently just 0.91%. The average rate for 15-year fixed-rate mortgages is just 1.37% per annum. “Swiss mortgages have never been so affordable,” says CEO Benjamin Manz.

Differences between lenders still large

Although interest rates are generally low, there are still major differences in the interest rates charged by different Swiss banks and insurance companies. Interest rates for 5-year FRMs range between 0.54% and 1.20% at different lenders. Interest rates for 10-year FRMs range between 0.83% and 1.30%. The most expensive mortgage offers can cost twice as much as the cheapest offers. Online mortgages continue to list among the most affordable offers.

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