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There is almost no movement in the costs of fixed-rate mortgages, but especially in the case of Saron mortgages. Economists at the Swiss National Bank (SNB) expect the key interest rate to rise by 25 or even 50 basis points next Thursday. The Saron follows this move at an almost 1:1 ratio and is again significantly more expensive.
Stick with Saron or do you prefer a flat rate mortgage? According to the Moneypark comparison platform, there are currently attractive offers, especially from insurance companies and sometimes pension funds.
“The cheapest ten-year flat rate mortgage currently costs 2.25 percent and is therefore less expensive than the average Saron mortgage,” says Moneypark’s latest review. No movement in fixed-rate mortgage rates is expected until the end of the year, and almost none of those surveyed expect an upward or downward correction.
What do financial experts recommend? Blick asked Comparis, VZ Vermögenszentrum and Moneypark.
Taking advantage of market weaknesses
Dirk Renkert (58) of the Comparis comparison service advises mortgage borrowers: Observe market fluctuations and use the right time to buy a mortgage. “Anyone who can temporarily finance significantly higher interest rates, possibly for several years, can take on the interest rate risks of a Saron mortgage,” says the finance expert. Moneypark experts note: “The difference between a flat rate mortgage and a Saron mortgage is so small right now that with a Saron mortgage you take more risk for a relatively small savings.”
Choose an appropriate risk strategy
According to Moneypark, long-term fixed-rate mortgages should continue to be the first choice for retirees, families, and risk-averse clients where planning and budgetary security are paramount. For example, if you need the flexibility to sell your property or want to pay back in the foreseeable future, a variable mortgage, a Saron mortgage, or a mix of Saron and fixed rate mortgages may make sense. Renkert von Comparis: “Anyone who can no longer afford higher interest rates should choose the planning security of fixed-rate mortgages.”
Important deadlines in planning
Anyone whose flat-rate mortgage is about to expire or is about to renew must adhere to contract notice periods. According to benchmarking services, these can take up to 6 months. “Start planning early,” advises Renkert. This also means: Comprehensive preparation of files for the mortgage application. “Wait two to three months to present the file to the lender,” the finance professional says. VZ Vermögenszentrum advises: “It is best to start the follow-up financing one year before it expires.”
Consider portability in old age
Income status is especially important when you retire. “Due to the low income, the affordability of an unchanged high mortgage loan could no longer be granted,” says Renkert of Comparis. “In the case of early retirement, this aspect should also be checked.” If you have sufficient liquid funds, you can consider partial depreciation.
Do not accept the first offer
«The best offer is more than attention. This also includes factors like equity, eligible income elements, depreciation obligations and more,” says Moneypark. Comparis also points out: “There is often a large gap between the interest rates that mortgage institutions showcase (guide rates) and the best negotiated rates.” An example from the comparison service shows potential savings of CHF 4,575 per year and CHF 54,900 over the entire period. Additionally, the assumptions are: Average showcase rate (10 years) 2.96 percent, best bargained interest rate: 2.35 percent. Annual interest rate variance: 0.61%. The basic mortgage is CHF 750,000.
Watch out for feed offers
And another tip from the VZ Vermögenszentrum: Beware of scam offers. «Special offers can seem like bargains. Critically check what’s behind it, »says mortgage expert Adrian Wenger (51). “For example, the benefit is usually limited to the first two or three years or only applies to a portion of the loan.”
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
