Mortgage rate forecast for 2025
Benchmark rates for 10-year fixed-rate mortgages have fallen sharply since the beginning of 2024. Will the trend continue in 2025? Comparis provides a forecast.
10.12.2024
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1. Mortgage rate forecast: what is likely to happen to mortgage rates in 2025?
Since the beginning of the year, benchmark rates for 10-year fixed-rate mortgages have fallen by 0.71 percentage points – from 2.26% to 1.55%.
The refinancing costs of banks have also decreased significantly:
The 10-year swap rate fell by 0.83 percentage points to 0.33% and the yield on 10-year federal bonds by 0.44 percentage points to 0.24%.
The Swiss National Bank (SNB) has pressed ahead with the interest rate reduction cycle, which began in March, and lowered the key interest rate to 1%. As a result, benchmark rates for mortgages have also fallen sharply.
According to the Comparis analysis, further key interest rate cuts are already priced into the current mortgage benchmark interest rates. Comparis financial expert, Dirk Renkert, explains:
Inflation is falling faster than had initially been expected. Further key interest rate cuts have already been priced into the sharply declining benchmark rates.
By the end of June 2025, the benchmark interest rates for 10-year fixed-rate mortgages should range from 1.45% to 1.65%. In the case of the benchmark rates for 5-year fixed-rate mortgages, an interest rate range of 1.30% to 1.45% is to be expected.
The fluctuation range of 10-year fixed-rate mortgages is predicted to be between 1.45–1.65% by the end of the year. For the benchmark interest rates for five-year fixed-rate mortgages, an interest rate range of 1.30–1.45% is anticipated.
| Benchmark rate (6 December 2024) | Interest rate range expected until the end of June 2025 | |
|---|---|---|
| 5-year fixed-rate mortgage | 1.40% | 1.30–1.45% |
| 10-year fixed-rate mortgage | 1.55% | 1.45–1.65% |
| 15-year fixed-rate mortgage | 1.61% | 1.55–1.75% |
Source: The benchmark rate information provided by Comparis/HypoPlus is based on the benchmark rates of over 30 lenders.
Current interest rate level
The benchmark rate for 10-year mortgages is currently 1.55%. However, the offers from the various mortgage providers differ greatly: HypoPlus, the Comparis mortgage partner, is currently able to negotiate a top interest rate of 0.94% (as of 6 December 2024).
2. Further rate cuts expected by the SNB
The SNB will decide this week on further rate cuts. Back in September, the SNB made initial indications of further possible interest rate cuts. Market observers also expect further interest rate cuts in 2025.
These expectations are based on fears of a further decline in inflation and the possible deflationary effects on the economy.
Swiss monetary policy is strongly influenced by global economic and political factors. Global developments such as the structural problems in key industries (e.g. Germany’s weakening automotive sector) or possible tariff increases by the USA can have a strong influence on exchange rates and thus on Swiss monetary policy.
There are uncertainties about how much the new US administration will increase the announced tariffs on foreign imported goods and how the affected countries will react.
3. What can people with a mortgage do?
Comparis has the following tips for people with mortgages:
Take advantage of market weaknesses
Keep an eye on the mortgage market. Take advantage of market fluctuations and time your mortgage application accordingly. Our interest rate overview will help you get a sense of the market. Further information is also available in the quarterly Comparis Mortgage Barometer.
Determine the appropriate risk strategy
If you would be unable to pay higher interest rates, you should opt for a fixed-rate mortgage. Could you also afford significantly higher interest rates for a while, possibly several years? If so, you can take on the interest rate risks of a Saron mortgage.
Don’t accept the very first interest rate offer
Never accept the very first rate offered to you by your bank. There is usually a significant difference between the interest rates advertised by lenders (benchmark rates) and the best negotiated rates.
The following example shows the savings potential based on a current quote from HypoPlus, the mortgage partner of Comparis, compared to the average benchmark rate:
| Benchmark rate (10 years) as of 9 December 2024 | 1.55% |
|---|---|
| Best rate negotiated by HypoPlus as of 9 December 2024 | 0.94% |
| Mortgage | CHF 750,000 |
| Rate difference per year | 0.61% |
| Saving per year | CHF 4,575 |
| Saving over the entire term | CHF 45,750 |
4. Are rental costs also going to fall?
Due to lower interest rates, the mortgage reference rate is likely to fall again in 2025. For many tenants, this is good news. If your rental agreement is based on the current reference interest rate of 1.75%, you may demand a rent reduction from your landlord.
However, new tenants must continue to expect rising rents due to the scarce supply of housing.
5. What is the Comparis mortgage rate forecast based on?
The information is based on the benchmark rates of some 30 lenders. These rates are updated daily and published in the mortgage rate overview.
This article was first published on 16.12.2021
