Swiss mortgage rates ‘climb drastically’ with more hikes on the way

Due to inflation and Switzerland’s new monetary policy, mortgages are now twice as expensive as they were a year ago.

Swiss mortgage rates 'climb drastically' with more hikes on the way
Higher mortgage rates make home ownership more expensive. Photo by Tierra Mallorca on Unsplash

A bit of bad news for owners, or prospective buyers, of Swiss properties: they will have to pay more than double of 2022 prices for a 10-year fixed rate mortgage, Moneyland consumer platform reported on Wednesday. 

“Swiss mortgage index has climbed drastically over the past year,” Moneyland said.

Currently, the average interest rate is 2.54 percent for five-year fixed mortgages and 2.76 percent for 10-year terms. As a comparison, at the beginning of 2022, these rates were 1.01 percent and 1.26 percent, respectively. 

“On average, the cost of a ten-year fixed-rate mortgage is around double of what it was at the start of 2022,” according to Moneyland’s CEO Benjamin Manz.

Five-year mortgages are 2.5 times higher than they were in early 2022, he said.

This is not exactly a surprising development, as experts had predicted the hike when Switzerland’s central bank (SNB) raised its key rate sharply last year to fight inflation, which, in turn, caused mortgage rates to go up as well.
The upward trend could continue well into 2023, as the SNB’s chief Thomas Jordan recently said that another hike is likely, further increasing the current interest rate of 1 percent.

READ MORE: Switzerland set for another interest rate hike, central bank chief warns 

This means that mortgages will remain “very expensive, and could well climb further as 2023 progresses,” Moneyland said.

If you already have a fixed-rate mortgage, then you are safe from rate increases for the term of your mortgage.

However, for new home buyers, or those with variable-rate mortgages, things may be more problematic.

“It is not excluded that mortgage interest rates will reach 3 to 4 percent next year,” according to Donato Scognamiglio, director of real estate platform Iazi. 

READ MORE: What’s the outlook for the Swiss property and rental market in 2023?

Are there any cheaper mortgage options in Switzerland?

These articles could help you find alternatives to traditional models:

Reader question: What is a reverse mortgage in Switzerland, and will it benefit me?
EXPLAINED: What is Switzerland’s ‘SARON’ mortgage?

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How can households in Switzerland benefit from falling interest rates?

A lower inflation rate in Switzerland could lead to significantly reduce interest rates. But what would this mean for you?

How can households in Switzerland benefit from falling interest rates?

After nearly two years of increasing prices for consumer goods and many services, the hope is for financial relief in 2024.

A lot depends on the inflation rate: will it continue to go up and make everything more expensive, or will the opposite — downward trend in costs and prices — finally prevail?

Here are some answers.

What is happening?

Compared to a nearly 3-percent inflation in Switzerland at the end of 2022, that rate fell to 1.4 percent in November this year, and is expected to remain well below 2 percent in 2024.

Also, economic forecasts call for Swiss National Bank’s current key rate of 1.75 percent to drop to 1 percent during 2024.

Will this lower rate signal positive news for Switzerland’s consumers?

If it evolves as economists expect, then yes.

This how your finances could benefit from lower rates.


Rents have risen in October and, with the recent increase of the benchmark interest rate this month, which is used to determine rents in Switzerland, many property owners will be able to up rents for their tenants by 3 percent next April again.

READ ALSO: Switzerland sees new rent hike but will yours go up? 

However, given the current interest rate forecasts (as mentioned above), no further rent increases will follow after that.

But since the benchmark interest rate reacts slowly to rate cuts, the relief will not be felt before 2025.


Swiss salaries are expected to go up by between 1.9 tand 2 percent on average next year.

Until now, rising prices absorbed any wage hikes.

If inflation / interest rate remains low, however, employees could see their real salaries — that is, money they receive after obligatory deductions —go up, even if slightly.
Mortgage interest rates

If you are hoping to become a property owner in the near future, the news is good.

That’s because new mortgages, or refinancing of old ones, should become more advantageous due to aforementioned rate cuts.

As of December 4th, interest rates for a 10 -year fixed mortgage averaged 2.49 percent; 2.32 percent for five-year terms; and 2.4 percent  for two years.

Interest on Saron mortgages is expected to fall from 2.61 to less than 2 percent by the end of next year, as the benchmark interest rate will drop to 1 percent by then.

READ ALSO: What will happen to the Swiss economy in 2024?