Saron or fixed-rate mortgage?: This is what the SNB interest rate decision means for homeowners

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.”

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.”

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.”

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.

«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.

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.”