Saron mortgages: important information at a glance
What is a Saron mortgage and how are mortgage rates calculated? Comparis answers key questions about these variable-rate mortgages.
03.09.2025
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1. What is a Saron mortgage?
A Saron mortgage is a mortgage with a variable interest rate. This means that, in contrast to a fixed-rate mortgage, the interest rate is not fixed for a certain term. Instead, it is regularly adjusted to reflect market conditions.
2. How are the interest rates for Saron mortgages calculated?
The interest rates of Saron mortgages are linked to the Saron (Swiss Average Rate Overnight). The Saron is an average interest rate at which banks lend each other money overnight. It is closely based on the key interest rate of the Swiss National Bank (SNB). Mortgage providers add a fixed margin to the current Saron rate. This depends on the customer’s creditworthiness.
If the Saron rate is negative, lenders will charge at least the agreed margin. In practice, a negative base rate is treated as 0%.
Calculating a Saron mortgage: example
This example shows how the interest on a Saron mortgage is calculated. The lender’s margin (1.0%) is added to the Saron interest rate (0.1%). This results in the effective interest rate for the period (1.1%).
| Mortgage | CHF 750,000 |
|---|---|
| Saron interest rate | 0.1% |
| Lender’s margin | 1.0% |
| Effective interest rate for the period | 1.1% |
| Interest costs for the period | CHF 8,250 |
Good to know
Although the Saron interest rate changes daily, Saron mortgage providers do not adjust the interest rate on a daily basis, but usually only every three months at the beginning of the quarter. The adjusted interest rate corresponds to a kind of average interest rate for the respective interest period (compounded Saron).
3. How high is the Saron interest rate currently?
The Saron interest rate is recalculated on a daily basis. The SNB publishes the current Saron interest rates. You can find more current developments in the mortgage market in the Comparis Mortgage Barometer.
Saron interest rate: changes over time
The chart shows that the Saron interest rate is closely based on the SNB’s key interest rate. If this falls, the Saron interest rate usually also falls.
4. Advantages of a Saron mortgage
A Saron mortgage model offers various advantages over long-term fixed-rate mortgages:
You benefit directly from lower interest rates: if market interest rates fall, your mortgage burden will also be reduced shortly afterwards.
Transparent calculation: the Saron interest rate is publicly available and based on actual transactions on the Swiss money market. This makes the rate transparent and in line with the market.
Lower or no early repayment penalty: the term for Saron mortgages is usually short. This is why an early repayment penalty is usually significantly lower than for fixed-rate mortgages with a long remaining term.
Saron mortgages are particularly attractive for borrowers who want to benefit from low interest rates and react flexibly to interest rate changes. However, they must be financially able to cope with possible interest rate fluctuations.
5. Risks of a Saron mortgage
Besides the advantages, Saron mortgages also have disadvantages compared to fixed-rate mortgages:
No planning security: the interest rate can change daily and is usually adjusted every three months. This makes future interest costs difficult to predict.
Direct interest rate risk: if market interest rates rise, mortgage rates usually increase quickly and noticeably. This can lead to significantly higher monthly costs.
Switching to a fixed-rate mortgage is not always practical: while switching from a Saron to a fixed-rate mortgage is recommended when interest rates rise, this is difficult to plan. Interest rates usually rise quickly, and the optimal time to switch is difficult to predict.
So if you opt for a Saron mortgage, you must be able to bear interest rate fluctuations and potential rises in costs. It’s important to have a certain risk appetite and a financial buffer.
Not sure whether a Saron mortgage suits your life situation? Our mortgage partner HypoPlus can help you find the right financing solution.
This article was first published on 05.09.2016
