mortgages switzerland january 2024
Banking News

Mortgage Interest Rate Dive Ends

January 24, 2024 - Felix Oeschger

The substantial drop in the interest rates of Swiss fixed-rate mortgages has ended, for the time being. The mortgage index shows that mortgage interest rates climbed again right as the new year began.

Between June and December of 2023, the interest rates of fixed-rate mortgages (FRMs) headed in one direction only: down. Within half a year, the average annual interest rate of two-year FRMs fell from 3.07 percent (June 19, 2023) to 2.18 percent (December 18, 2023). The average rate of five-year FRMs fell from 3.02 percent to 2.09 percent, and that of ten-year FRMs slid from 3.04 percent to 2.21 percent. In other words, fixed-rate mortgages became around 30 percent cheaper over the second half of 2023.

Mortgage interest rates today

After flattening out in December 2023, the interest rates of fixed-rate mortgages have climbed again since the start of 2024, and currently sit at an average of 2.25 percent for two-year FRMs, 2.21 percent for five-year FRMs, and 2.34 percent for ten-year FRMs (refer to the interest rate table available at the foot of this report).

Will SARON mortgages become cheaper than FRMs again?

Even with the rate hike, FRMs are currently still cheaper than SARON mortgages, which have an average annual interest rate of 2.61 percent, according to the mortgage index. This continuing situation is extraordinary because historically, FRMs have usually been more expensive than money market mortgages (SARON mortgages since 2021, when they replaced LIBOR mortgages).

If the situation develops in the way that most market observers expect it to, the SARON will go down between now and the end of 2024. If that happens, SARON mortgages could soon be cheaper than fixed-rate mortgages again.


Inflation in Switzerland, as well as in other European countries and the US, seems to be under control at the present time. The market’s expectation is that central banks will lower their key interest rates several times over the course of this year.

Currently, the most widespread opinion among Swiss economists is that in 2024, the Swiss National Bank (SNB) will lower its interest rate twice by 0.25 percentage points per change. If that happens, the key interest rate would sit at 1.25 percent at the end of the year. The likelihood that the SNB will lower its key interest rate is already factored into the current interest rates of FRMs.

But if the economy develops more poorly than expected, the SNB could end up making much larger cuts to its key interest rate. That scenario would favor continued reductions in mortgage interest rates. But it is also possible that inflation rates could climb again, forcing a tighter financial policy, which would push mortgage interest rates up. The major differences in the predictions being made by different economists reveal the present uncertainty about how interest rates and markets will develop,

“Because of the uncertainties, it is possible that we will see larger fluctuations in mortgage interest rates in the coming months,” says analyst Felix Oeschger.

More on this topic:
Interest rate table (PDF)
Interest rate graph (PDF)
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Expert Felix Oeschger
Felix Oeschger is an analyst and expert at He is responsible for several core topics.