How has the starting point of 2023 changed for property owners?

In the first weeks of January, the residential real estate interest rate index of the comparison portal was announced. Hipoteke.ch through flat rate mortgage adjustment. However, the home loan interest rate index has been rising since mid-January and is now at 2.51 percent, still well below the interest rate level at the beginning of the year. Just below the yearly high of 2.9 percent as of October 2022, it is still unreachable.

Strong economic data and persistent inflation gave the market hope that rate hikes are coming to an end. erode to give permission. Since mid-January, yields on the ten-year federal bond have been rising again. The refinancing rates that are decisive for fixed rate mortgages (exchange) rose sharply. This swap rate consists of the yields and risk premium of same-term federal bonds barter market together.

Swiss inflation rises Clearly

Expectations of rising interest rates received additional fuel last week: Inflation in Switzerland rose significantly from 2.8 percent (December 2022) to 3.3 percent (January 2023). “This plus corresponds to a significant change of 18 percent. On the other hand, Swiss inflation is still low in an international comparison. Our interest rate outlook has not changed as a result » says mortgage specialist and managing director oxifina, Giampiero Brundiawith cash.ch.

However, experts disagree on the inflation situation in Switzerland: “The inflation problem is not over yet and it will be over for us in Switzerland as well. for a while busy,” says Florian attacker from Hipoteke.ch. It is feared that inflation will increase further. Mortgage specialist, in March Switzerland The Central Bank (SNB) again significantly increased the key interest rate.

And Burak HE, HEAD Research with real estate and mortgage service provider avobisworried that there are currently no markings on any segments deflationary There are developments. Some industries will tend to increase additional costs. Consumer “This development exacerbates the problem of inflation expectations of producers and consumers deviating from the SNB’s inflation target. We now expect the SNB to raise interest rates by 50 basis points at each of the next two meetings. HE on request cash.ch.

“Showcase prices” as a cheap snapshot

After the US Federal Reserve (fed) and the European Central Bank (ECB) raised the base interest rate in February 2023, the SNB is also under pressure to raise the base rate at its next interest rate meeting in March, regardless of the inflation situation, due to the widening interest rate. rate difference. “When the pressure rises fed and above all the ECB has further increased the key interest rate. “The SNB will have to raise interest rates to keep up,” he says. Brundia. Any increase – for whatever reason – will make Saron mortgages primarily, but also fixed-rate mortgages more expensive. ECB in March probably raise the key interest rate by another 50 basis points as planned. Inside fed However, due to strong economic data and ongoing inflation, there is talk of a 50 basis point increase in interest rates again in March. Further increase in interest rates and uncertainty about future inflation dynamics probably It causes US government bond yields to continue to rise.

«Because of the interest rate differential, this could lead to Switzerland government bond follow suit,” he warns HE. As a result, long-term interest rates in Switzerland could hit a new high.
The current “showcase prices” for Swiss mortgages are therefore probably A positive picture: Five-year fixed-rate mortgages start at 2.08 percent on familiar benchmarks, and the cheapest home loan offer over a decade is 2.26 percent. Other interest rates can be negotiated depending on income, amount of equity or type of property. For those who don’t have mortgage debt highest credit score bring it with you, interest costs can also be significantly higher.

Lowest mortgage interest quotes or benchmarks on the comparison platform

*Only Best conditions, general information – the actual interest rate may be higher due to various factors. ** The best New mortgage terms of CHF 800,000 for a property worth CHF 1 million in the canton of Zurich, reference values.

The lowest margin for a Saron mortgage on benchmarking platforms is 0.53 percent. Lowest interest costs are 1.47 percent, with a Saron interest rate of 0.94 percent based directly on the SNB’s base interest rate. This level will not change until the SNB’s next monetary policy assessment on March 23. But this HE If the SNB is correct in its forecast, interest costs for Saron mortgage holders will rise to almost 2.5 percent in 2023.
Brundia On the other hand, Saron expects the price of its mortgage to rise only 0.5 percent over the next twelve months. He sees the ten-year fixed-rate mortgage 0.25 to 0.50 percent higher on average. It then predicts that interest rates will fall by as much as 0.5 percent in the next one to two years due to a slowdown in inflation.

Have a rude awakening?

«Lately The yield curve has flattened substantially. This shows that the market is not expecting a very sharp increase in interest rates in the next few years. But higher interest rates are expected in the short term » attacker. Therefore, in March, short-term interest rates will become clear and long-term interest rates will be less strong. go up.
Moreover, the impact of interest rate hikes on short-term housing loans is already greater. The shorter the maturity, the stronger the SNB’s interest rates. The longer the mortgage term, the more it controls market interest rate levels.

“Those who were previously in Saron now have the opportunity to take a five-year or even ten-year fixed-rate mortgage at a relatively small premium,” he said. attacker. Degrees with a ten-year fixed-rate mortgage are still much less than they used to be. Many entered a five-year or three-year flat rate mortgage or saron. It will simply Suppose interest rates will fall or stay the same.

Have HE from avobis True to his forecast, this could be expensive for many: “In the case of long-term fixed-rate mortgages, the inflation situation will likely mean that interest rates will hit a new high”. Uncertainties can also mean spreads for 10-year government bonds if 10-year government bond yields rise above their previous peak of 1.60 percent. Exchange Rates to climb. This will cause mortgage rates to rise even higher than bond yields.

It’s not empty to take risks and take risks labels

The flexibility offered and the claim that money market mortgages are historically long-term considered by far the cheapest form of real estate financingconvinces many people. Ultimately, anyone who buys a Saron mortgage should also know that it rises very quickly when interest rates rise – an interest rate of 4 or 5 percent is not a dream, as history has shown. The willingness to take risks and the ability to take risks are not empty buzzwords, but they are essential when choosing a mortgage. “If you can’t afford higher interest rates, you’d rather bite the bullet and take a longer mortgage,” he advises. attacker.

so much right now volatile In the market environment, the following is even more important: First of all, risks need to be understood and monitored. Secondly, you should always get different opinions and offers. Third, you must set the expiry dates of the mortgages so that reissue is possible. As a result, this also improves the negotiating position with the provider. Fourth, it is always advantageous to consider different scenarios in financial planning.

(This text was first published on 19.02.2023. cash.ch published.)

Source :Blick