Long-term fixed-rate mortgages in demand in the third quarter
Published: Thursday, Oct 10th 2024, 00:50
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Conditions for fixed-rate mortgages have continued to improve significantly in Switzerland. According to the comparison portal Comparis, long-term fixed-rate mortgages in particular were in high demand in the third quarter as key interest rates continued to fall.
Two weeks ago, the Swiss National Bank (SNB) lowered the key interest rate for the third time in a row by 25 basis points to 1.00 percent and held out the prospect of further interest rate cuts. According to Comparis on Thursday, players on the mortgage market had already been expecting interest rates to fall further since June, which had also led to falling mortgage rates.
According to Comparis, the benchmark rate for ten-year fixed-rate mortgages fell to 1.81% at the end of September. This was 0.33 percentage points lower than at the end of June. For five-year fixed-rate mortgages, the benchmark rate fell by 0.36 points to 1.68 percent. At the beginning of the year, you even had to pay 2.26 percent for a ten-year mortgage and 2.13 percent for a five-year mortgage.
The benchmark rates calculated by Comparis are published but still negotiable average interest rates from around 30 mortgage institutions.
High share of over 70 percent
According to Comparis mortgage partner HypoPlus, around 72 percent of all mortgage customers opted for a fixed-rate mortgage with a term of ten years or longer in the third quarter. In the two previous quarters, this proportion was significantly lower at 40 to 50 percent.
On the other hand, the share of medium-term mortgages (four to six years) halved to around 14% compared to the previous quarter, according to the press release. The proportion of mortgages with a term of up to three years (including Saron mortgages) also fell from just under 20 percent to 7 percent.
The strong demand for longer-term fixed-rate mortgages is no coincidence: at 1.6 to 2.0 percent, first-rate Saron mortgages were still slightly more expensive than ten-year fixed-rate mortgages (1.5 to 2.0 percent), according to the report. In addition, given the ongoing geopolitical risks, many mortgage borrowers prefer planning security.
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