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Homeowners can’t breathe a sigh of relief yet. Because owning a home will continue to be more expensive. After mortgage interest rates rose last year, financing will continue to be more expensive until the end of the year. Saron will increase the most in the coming months.
But the fixed-rate mortgage interest rate curve also points up: At 2.96 percent for the five-year fixed-rate mortgage and 3.12 percent for the ten-year fixed-rate mortgage, the online benchmarking service Moneypark’s mortgage index is currently at its highest level. year. The peak is probably not reached yet.
More rate hikes imminent
ZKB estimates that the market average for a five-year flat rate mortgage will be 3.25 percent by the end of 2023. The interest rate for a ten-year fixed-rate mortgage is expected to likely rise to 3.3 percent by the end of the year. And Saron to 2.6 percent. The Saron mortgage has made the biggest splash, but remains the cheapest option.
The sharp increase in Saron mortgages is due to the assumption that Swiss National Bank SNB will raise its key interest rate again this year. “We currently assume that the SNB will see one or two more rate hikes this year,” says Dennis Eicker, 33, real estate specialist at mortgage broker Moneypark. This will directly affect the saron.
Saving potential is reduced
This reduces the previously high savings potential of the Saron mortgage compared to a flat rate mortgage. “We think fixed-rate mortgage rates are relatively stable, provided there are no other shocks,” Eicker says. This is also due to the fact that the markets have predicted some rate hikes in 2022. “The further rate hike expected by SNB is already priced into fixed mortgages,” said Markus Stocker, 42, Head of Finance at ZKB.
The Saron mortgage remains attractive compared to the flat rate mortgage. “But if mortgage interest rates continue to rise for several years, a fixed-rate mortgage may be a more economical option in the current environment,” Ursina Kubli, 43, Head of Real Estate Research at ZKB, tells Blick.
Is it worth the risk?
But is the savings worth the extra risk you take with a Saron mortgage? Moneypark expert Eicker denies this: “The gap between flat rate mortgages and Saron is so small right now that with a Saron mortgage you’re taking a huge risk for relatively small savings.” ZKB puts it this way: “For households with limited financial resources or weak nerves, flat rate mortgages are often the right choice,” says Kubli.
As far as current interest rates are concerned, ZKB sees no reason to panic for long. The new, higher interest rate level should be placed in perspective. The long-term average of a five-year fixed-rate mortgage is 4 percent. “This is why we don’t rate current interest rates that high in a historical comparison,” Kubli says.
According to the bank, it is quite possible that we will reach the top this year and that the SNB will even consider an initial reduction in the key rate next year. “The Saron mortgage could therefore become cheaper again in 2024,” Stocker says. However, as far as longer-term fixed-rate mortgages are concerned, the following also applies: interest rates already anticipate this expectation and should therefore remain relatively stable in 2024.
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.
