Mortgage Barometer 2024: trends on the mortgage market
Discover the latest mortgage trends in the Comparis Mortgage Barometer. Long-term fixed-rate mortgages were again in high demand in Q3 2024.
10.10.2024
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1. How have benchmark mortgage rates changed?
Interest rates on fixed-rate mortgages have been declining since June 2024 – and they also fell significantly in the third quarter.
In the third quarter of 2024, the benchmark rate for 10-year fixed-rate mortgages fell from 2.18% to 1.81% (as of 30 September), with an interest rate range of approximately 1.5–2.0%. As a comparison: in March 2024, they cost 1.7–2.2%.
The benchmark interest rate for 5-year fixed-rate mortgages has decreased from 2.09% to 1.68% since the end of June 2024 (as of 30 September), and the average interest rate range is around 1.4–1.8%.
At the beginning of the year, the benchmark rates for 10-year and 5-year fixed-rate mortgages were 2.26% and 2.13% respectively, 0.45 percentage points higher than at the end of September.
Lower rates have also been observed for Saron mortgages. They now cost an average of 1.6–2.0%.
Interest rates for 10-year fixed-rate mortgages have almost halved since their highs in October 2022. Mortgages with long repayment terms are now particularly in demand, as they offer moderate interest rates and planning security in times of high geopolitical risks.
2. Current mortgage rates in Switzerland
Mortgage rates vary significantly depending on the type of mortgage, term, lender, canton, loan-to-value ratio and affordability.
Comparis compared the average differences between the benchmark rate and the top interest rate of the Comparis mortgage partner HypoPlus. The comparison revealed a considerable savings potential.
Savings potential when taking out a mortgage
The interest rates of the deals actually negotiated are often below the benchmark rates.
For example: the best interest rate brokered by HypoPlus for a 10-year fixed-rate mortgage at the end of September was 1.47% – with a benchmark rate of 1.81%.
You can find the latest mortgage interest rates, which are updated daily, in the Comparis mortgage rate overview.
| Fixed-rate mortgage term | Benchmark rate (as at 30 September 2024) | Best interest rate from HypoPlus (as at 30 September 2024) | Potential savings on a mortgage of 750,000 francs |
|---|---|---|---|
| 3 years | 1.61% | 1.15% | 10,350 francs |
| 5 years | 1.68% | 1.26% | 15,750 francs |
| 10 years | 1.81% | 1.47% | 25,500 francs |
| 15 years | 1.90% | 1.56% | 38,250 francs |
Source: Comparis, HypoPlus
The benchmark rates calculated by Comparis are the average rates advertised by around 30 mortgage lenders and these rates can be negotiated. They are updated daily and published in the mortgage rate overview.
3. Falling key interest rates, falling mortgage rates
The Swiss National Bank (SNB) lowered the key interest rate in September for the third time in a row – from 1.25% to 1%.
Even before then, the European Central Bank (ECB) reduced the key interest rate by 0.25 percentage points to 3.5%. The US Federal Reserve lowered the key interest rate by 0.5 percentage points – to an interest rate corridor of 4.75–5.00%.
Due to market expectations of falling key interest rates and the decisions that have actually been made, the mortgage rates in the third quarter have fallen for all mortgage models.
Fixed-rate mortgages are still cheaper than Saron mortgages
Due to the third rate cut in a row, the interest rate differential between Saron mortgages and fixed-rate mortgages has decreased further. Nevertheless, fixed-rate mortgages are still slightly cheaper than Saron mortgages. Why is this the case?
Dirk Renkert explains:
When setting interest rates for fixed-rate mortgages, mortgage institutions take into account market expectations for further changes in interest rates. Expectations of further falling interest rates have had a favourable effect on the conditions of fixed-rate mortgages since June and in the following months. Due to this early pricing, fixed-rate mortgages continue to be cheaper than Saron mortgages despite the SNB’s recent interest rate cut.
4. Which type of mortgage is most popular?
The deals concluded with the Comparis mortgage partner HypoPlus show clear trends:
The share of long-term fixed-rate mortgages (10 years or longer) increased to about 72% in the third quarter. In the previous two quarters, this figure was still between 40–50%.
Mortgages with medium terms (4–6 years) lost popularity and fell to around 14% – a halving compared to the second quarter of 2024 At that time, the share was still around 30%.
Mortgages with short terms (up to three years, including Saron mortgages) only accounted for about 7% of deals. In the previous quarter, it was almost 20%. Around 5% of this was attributable to Saron mortgages.
Affordability: people often forget about their income situation at retirement. If your income is lower than before retirement, the affordability of the mortgage is at risk. This also applies to early retirement. Tip: check whether a partial amortization is possible.
Renewal of an expiring fixed-rate mortgage: be sure to observe the contractual notice periods. Start planning early and put together a dossier for lenders. The lead time is about two to three months.
Good to know: with a split into two or more tranches, you can increase the flexibility of fixed-rate mortgages. You do not have to renew the entire mortgage loan, just the tranche that is due. However: division into tranches can weaken your negotiating position and make it more difficult to switch providers.
5. Data sources
HypoPlus, the mortgage partner of Comparis, provides the interest rates for the Comparis Mortgage Barometer. They are based on the benchmark rates of some 30 lenders. The data is updated daily and displayed in the mortgage rate overview.
The next Mortgage Barometer will come out in January 2025.
This article was first published on 05.10.2013
