Swiss mortgage rates of 2021

Regarding mortgage rates,

time has a way of arranging things
While these crazy savings are truly exciting, I cannot say that I am hyped about the mortgage rates. It is just like stars in a sky red from the Thunder, you can barely see them.

Of course, Switzerland has always put obstacles in the way of those wanting to become property owners. Here, the American dream’s cost is very precise: at least 20% of the total value of the relevant property.

A major obstacle which explains why only a third of Swiss households own there housing, compared with a good half in France and, an impressive number, 3/4 in Italy. 

That being said, even in the most total darkness there is always a ray of light. Be it even just a spark, that might start the most majestic of fires. This spark, is the mortgage loan. 

Fluctuating between one and 2% in 2020, it is at historically low rates. To put that in perspective, in December 2008, the average interest rate was 3,45%. 

Had I decided to buy the same apartment during that year, it would have costed me 2,412 CHF on a monthly basis! Compared with 1,257 CHF in 2020.

Two charts comparing real estate expenses with mortgage interest rates

Such big differences just because of the mortgage rate? Absolutely insane, right?

Financial institutions: important differences

Obviously, time seems to be doing things right concerning mortgage rates but this element is not the only one on which you should rely. 

Here are a few pieces of advice that will make your mortgage rate decrease and improve your mortgage overall: 

  • Always ask at least for two different offers and try not to follow blindly the good advice of your private consultant.
  • It is likely that over the course of the same year, a bank run insurance meets its mortgage volume objectives and therefore increases the rates on purpose in order to reduce demand. 
  • Try to build a solid file: buying real estate property is similar to a rental request, the more the bank will feel like it can trust you, the more it is likely to grant your request and to do so advantageous terms (for the same property, different people will have different terms). 
  • Of the location: banks give priority to some files… It is nothing personal but they simply prefer to invest in what they consider to be promising properties or regions. Big institutions are more likely to accept properties in big cities, whereas small banks will be more interested in risks and will follow you to less central locations.

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