The interest rates of Swiss fixed-rate mortgages have declined since mid-October 2018. Published guide interest rates for 5-year fixed-rate mortgages averaged just 1.04% on January 14, 2019. The average guide rate for 10-year fixed-rate mortgages was just 1.45%. The interest rates of short-term fixed-rate mortgages are currently among the lowest recorded.
5-year FRMs at historic lows
On the October 12, 2018, the arithmetic average interest rate of 5-year fixed-rate mortgages was still 1.19%. By December 31, 2018, the average guide rate had sunk to 1.05% and on January 14, 2019, the average guide mortgage rate was just 1.04%. “That equates a 13% decrease in the average interest rate since mid-October,” states moneyland.ch analyst Felix Oeschger.
The current average rate is a record low for 5-year FRMs. “Using short-term mortgages has never been more affordable,” says moneyland.ch CEO Benjamin Manz. The guide mortgage rate for 5-year FRMs published by the most expensive provider is 1.2%, while that of the most affordable provider is just 0.69% per annum.
10-year FRMs compared
On October 12, 2018, the arithmetic average interest rate for 10-year FRMs was 1.7%. At the end of 2018, the rate was 1.47%. The average guide rate on January 14, 2019 was 1.45%. These figures show that the average interest rate has sunk by around 15% since mid-October. Interest rates for 10-year FRMs are the lowest they have been in over 1 year.
The average interest rate for 10-year FRMs is 1.47% for mortgages from Swiss banks, 1.35% for mortgages from Swiss insurance companies and just 1.28% for online mortgages. The most expensive service provider has a published guide rate of 1.6%. The cheapest service provider has a 1.16% published guide mortgage rate.
How will interest rates develop in 2019?
A majority of Swiss market observers predict a small climb in interest rates in 2019. “But the possibility of the interest rates of long-term FRMs reaching new historic lows cannot be ruled out,” says Benjamin Manz. There is no sure way to know how interest and mortgage rates will develop, and even a sharp hike in interest rates in 2019 cannot be ruled out.
Mortgage rates vary in a big way between lenders
The interest rates of mortgage offers generally follow each other. But although the rates used by different Swiss banks and insurance companies tend to rise and fall in unison, there are major differences in how high individual rates are.
The most expensive mortgages can be twice as expensive as the most affordable mortgages. “In general, the interest rates of mortgages from online mortgage providers are more favorable than those of conventional mortgages,” states Felix Oeschger. Long-term mortgages from Swiss insurance companies are generally more affordable than those from banks.
Interactive mortgage comparison