Best Mortgage Providers in Switzerland
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Table of Contents
Introduction
Most people always dream of having their own home, which is achievable through a little hard work.
Finding a suitable mortgage can become a complex task specifically because of the mortgage rates.
Especially in a country like Switzerland, high-interest rates may add up and lead to higher-than-usual costs.
That’s why, I wanted to provide a list of the best mortgage providers available within Switzerland.
As a bonus, I will also discuss the crucial information related to Swiss mortgages.
Disclaimer – Note that the mortgage rates presented in this article are just for educational purposes and you should treat them the same.
I am in no way affiliated with any of these mortgage providers and neither do I endorse them.
The interest rates provided in this article refer to the interest p.a. and it should not be confused with overall interest.
Therefore, let us begin discussing the best Swiss mortgage providers and their interest rates.
Credit Suisse
The fixed mortgage rates at Credit Suisse are as follows:
• For 2 years: 2.61%
• For 3 years: 2.59%
• For 4 years: 2.61%
• For 5 years: 2.63%
• For 6 years: 2.67%
• For 7 years: 2.72%
• For 8 years: 2.76%
• For 9 years: 2.79%
• For 10 years: 2.83%
SARON mortgage and SARON (rollover) mortgage details are only made available when the applicant contacts Credit Suisse.
The current interest rate for construction loans is 2.60% plus ¼% of the credit commission per quarter.
The adjustable-rate mortgage is provided at an interest rate of 3.85%.
UBS
Fixed-rate mortgages at UBS come with 2 to 10-year terms of flexibility. These mortgages even come with a reduction of 0.30% when you get a mortgage for your first home with UBS.
SARON mortgage comes with an unlimited term period and variable interest rates. There is a possibility to switch to a fixed-rate mortgage to lock in the current interest rate.
Building financing is provided with interest rates varying based on the type of use and an indefinite term.
If the property is energy efficient, UBS provides a special interest reduction offer of 0.40%.
Preferential interest rates are offered for renovation projects alongside an eco-bonus of 0.30%.
To find the exact interest rates, you will have to contact UBS through their official website.
PostFinance
At PostFinance, the fixed-rate mortgage rates are as listed below.
• For 2 years: 2.20%
• For 3 years: 2.16%
• For 4 years: 2.16%
• For 5 years: 2.18%
• For 6 years: 2.22%
• For 7 years: 2.26%
• For 8 years: 2.30%
• For 9 years: 2.32%
• For 10 years: 2.36%
• For 11 years: 2.45%
• For 12 years: 2.47%
• For 13 years: 2.48%
• For 14 years: 2.49%
• For 15 years: 2.50%
The term period for a SARON mortgage is 3 years, the interest period is 3 months, and the interest rate is Compounded SARON 3 months plus 0.70%.
The minimum amount for a fixed mortgage is CHF 100,000.
SARON mortgages can be changed to fixed-rate mortgages at the end of each quarter.
The interest rates may change based on the creditworthiness of the owner-occupied home ownership.
Both mortgages have an extension fee of CHF 100, a credit modification charge of CHF 250, and a premature withdrawal charge of CHF 500.
Third-party fees like land registration or notary costs are to be paid by the borrower.
The maximum amount that can be borrowed is 80% of the property value for owner-occupied homes and 75% for holiday homes.
It is suggested to contact PostFinance to get accurate interest rates and they vary from time to time.
Migros Bank
The fixed mortgage rates at Migros Bank are as follows:
• For 2 years: 2.31% (standard interest rate: 2.61%)
• For 3 years: 2.30% (standard interest rate: 2.60%)
• For 4 years: 2.31% (standard interest rate: 2.61%)
• For 5 years: 2.34% (standard interest rate: 2.64%)
• For 6 years: 2.37% (standard interest rate: 2.67%)
• For 7 years: 2.42% (standard interest rate: 2.72%)
• For 8 years: 2.46% (standard interest rate: 2.76%)
• For 9 years: 2.49% (standard interest rate: 2.79%)
• For 10 years: 2.52% (standard interest rate: 2.82%)
The rates mentioned above are the preferential rates for the fixed mortgage. They apply to the online conclusion of owner-occupied residential properties for purchase financing and redemption from other institutions.
It is mandatory to maintain a good credit score to become eligible for a mortgage at Migros Bank.
For homes built before 2018, the preferential rates range from 2.46% to 2.67% and standard rates range from 2.61% to 2.82%.
The interest rates for the SARON mortgage include Compounded SARON 3 months plus a 0.8% surcharge.
It is wise to contact Migros Bank regarding their actual interest rates and offer to be on the safe side.
BCV
There are four types of mortgage loans offered by BCV, and all of them require a 20% downpayment, while the loan and maintenance expense should be less than 1/3 of your income.
The minimum loan amount is CHF 20,000 and the repayment methods include direct as well as indirect.
A short-term mortgage has a term period of 1 – 12 months with lower interest rates in the market.
SARON mortgage rates are based on the SARON compounded plus margin and the term includes two to five years.
Fixed-rate mortgages come with a term of 2 – 10 years with a maximum loan amount of 80% of the purchase price.
Building Plus mortgages come with a term of 4 – 10 years with a maximum loan amount of 80% of the purchase price.
A Green Bonus of 0% interest rate for the first 12 months applies to fixed-rate and Building Plus mortgages.
The exact mortgage rates are not mentioned on the provider’s website, and therefore, you should contact BCV for exact rates.
Crédit Agricole
The SARON mortgage rate offered by Credit Agricole is probably one of the lowest with the SARON index plus a 0.6% bank margin.
The rates for fixed-rate mortgages at Credit Agricole are as follows:
• For 3 years: 2.22%
• For 5 years: 2.29%
• For 7 years: 2.38%
• For 10 years: 2.47%
• For 15 years: 2.68%
The bank margin is a component of our Ecoprêt package and is provided for reference, but its application is contingent on specific conditions.
If the SARON index, calculated quarterly, turns negative, the applicable mortgage rate aligns with the bank’s margin.
The mortgage rates mentioned are exclusively applicable to projects financed in Switzerland under our Ecoprêt program.
These rates are not guaranteed, subject to certain terms, and are subject to potential alterations.
They cannot be combined with other promotions. For more details, please get in touch with your local branch of Credit Agricole.
SwissLife
The interest rates for fixed-rate mortgages at SwissLife are as follows:
• For 3 years: 2.49% (green mortgage interest rate: 2.24%)
• For 4 years: 2.45% (green mortgage interest rate: 2.20%)
• For 5 years: 2.41% (green mortgage interest rate: 2.11%)
• For 6 years: 2.45% (green mortgage interest rate: 2.15%)
• For 7 years: 2.49% (green mortgage interest rate: 2.19%)
• For 8 years: 2.50% (green mortgage interest rate: 2.20%)
• For 9 years: 2.53% (green mortgage interest rate: 2.23%)
• For 10 years: 2.56% (green mortgage interest rate: 2.26%)
• For 11 years: 2.58% (green mortgage interest rate: 2.33%)
• For 12 years: 2.61% (green mortgage interest rate: 2.36%)
• For 13 years: 2.63% (green mortgage interest rate: 2.43%)
• For 14 years: 2.65% (green mortgage interest rate: 2.45%)
• For 15 years: 2.68% (green mortgage interest rate: 2.48%)
• For 16 years: 2.70% (green mortgage interest rate: 2.55%)
• For 17 years: 2.72% (green mortgage interest rate: 2.57%)
• For 18 years: 2.74% (green mortgage interest rate: 2.64%)
• For 19 years: 2.76% (green mortgage interest rate: 2.66%)
• For 20 years: 2.78% (green mortgage interest rate: 2.68%)
• For 21 years: 2.80% (green mortgage interest rate: 2.70%)
• For 22 years: 2.82% (green mortgage interest rate: 2.72%)
• For 23 years: 2.84% (green mortgage interest rate: 2.74%)
• For 24 years: 2.87% (green mortgage interest rate: 2.77%)
• For 25 years: 2.88% (green mortgage interest rate: 2.78%)
Discounts on fixed-rate mortgages apply to SwissLife customers with:
⁃ Home Option
⁃ Option Complete within your Swiss Life FlexSave Uno/Duo savings insurance
⁃ Option Complete within the Swiss Life Dynamic Elements Uno/Duo
⁃ Swiss Life Immo Elements Uno/Duo savings and risk insurance
The discounts include:
⁃ For maturities up to nine years: 0.05% per annum.
⁃ For maturities exceeding ten years: 0.10% per annum.
⁃ Maximum mortgage discount: CHF 350,000.
Please note that the green mortgage products cannot be combined with the preferential terms offered by the Home Option or Option Complete within a Swiss Life insurance contract.
SARON (the basic interest rate) is combined with an interest margin, with a specific green SARON interest margin.
For 3 months, the calculation is as Basic interest rate (SARON) + 0.80%
These SARON mortgages are available for terms of 3 or 5 years and can be established in conjunction with either a fixed-rate or variable-rate mortgage.
It’s important to note that the SARON mortgage portion should not exceed 30% of the total loan amount and must be a minimum of CHF 100,000.
Additionally, SwissLife offers variable-rate mortgages with the following interest rates:
⁃ 1st Mortgage: 2.75% per annum
⁃ 2nd Mortgage: 3.25% per annum
For those with sustainable building standards in property construction or renovation, you may want to explore green mortgages.
By doing so, you can not only reduce your energy costs but also take advantage of appealing interest rates.
Contact SwissLife to get any additional details or apply for a mortgage.
Hypothekarbank Lenzburg
Fixed-rate mortgages offer reliable budget planning with terms of 2 to 10 years, maintaining a constant rate throughout the entire term.
Fixed-rate mortgages at Hypothekarbank Lenzburg are as follows:
• For 2 years: 2.620%
• For 3 years: 2.590%
• For 4 years: 2.640%
• For 5 years: 2.660%
• For 6 years: 2.710%
• For 7 years: 2.750%
• For 8 years: 2.780%
• For 9 years: 2.810%
• For 10 years: 2.800%
These are suitable for all types of real estate financing, with direct and/or indirect amortization options based on the contract.
Variable Mortgages (Classic) offer flexibility with no time limit and interest rates that adjust according to market conditions.
The variable mortgage interest rate is 2.875% with an unlimited term period.
The Construction Loan is designed to support construction projects and is applied during the construction phase.
The interest rate for construction loans is set at 2% with a commission of 0.25% per quarter.
Step Mortgages (Maxi) combine the flexibility of variable mortgages with the predictability of fixed-rate mortgages (2 – 10 years).
Money Market Mortgages feature a flexible interest rate (SARON) that consciously accepts interest rate fluctuations.
The SARON mortgage rate at the writing is set at 2.601% with terms ranging between 2 – 3 years.
Contact Hypothekarbank Lenzburg to find additional details or apply for a mortgage.
Generali
A fixed-rate mortgage ensures a steady interest rate for your chosen term.
However, one cannot end the mortgage during this period, except with an early withdrawal fee upon property sale.
As of 23rd October 2023, the interest rates for fixed-rate mortgages are as follows:
• For 2 years: 2.50% to 3%
• For 3 years: 2.40% to 2.90%
• For 4 years: 2.35% to 2.85%
• For 5 years: 2.30% to 2.80%
• For 6 years: 2.30% to 2.80%
• For 7 years: 2.30% to 2.80%
• For 8 years: 2.35% to 2.85%
• For 9 years: 2.35% to 2.85%
• For 10 years: 2.40% to 2.90%
Variable mortgage interest rates are market-dependent and may change with a three-month advance notice.
You have the flexibility to terminate the mortgage with a six-month notice.
As of 23rd October 2023, the interest rates for variable mortgages are 2.75% – 3.25%.
Please note that the interest rates are provided for informational purposes and are subject to change without prior notice before policy conclusion.
Therefore, it is wise to contact Generali to know more details or apply for a mortgage.
BPS (Suisse)
With a fixed-rate mortgage, you can effectively manage your expenses, ensuring your budget is shielded from market fluctuations.
The fixed-rate mortgage interest rates at BPS (Suisse) are as follows:
• For 1 year – 2.950%
• For 2 years – 2.850%
• For 3 years – 2.800%
• For 4 years – 2.850%
• For 5 years – 2.850%
• For 6 years – 2.900%
• For 7 years – 2.950%
• For 8 years – 3.000%
• For 9 years – 3.050%
• For 10 years – 3.050%
If you follow money market trends and need to know your interest rate in advance, the SARON rollover mortgage is perfect for you.
This ensures a known and guaranteed interest rate at the quarter’s beginning.
The interest rate is SARON Compound plus margin (set at the beginning of each quarter)
The variable-rate mortgage is designed for those who want to seize opportunities presented by medium and long-term interest rate developments.
The interest rate for a variable-rate mortgage is 3.500% (variable with notice).
Enjoy a favorable PREMIUM rate on a 3a Life Benefit pension account, with tax benefits for indirect repayments, as a BPS (SUISSE) mortgage holder.
Having discussed the best mortgage providers in Switzerland, let us have a look at some important information.
How to Find the Right Mortgage
Discovering the ideal mortgage for your needs involves a few key steps:
— Determine the Mortgage Type
Decide which mortgage model suits your situation, such as a fixed-rate mortgage.
Carefully consider the mortgage term if you opt for a fixed-rate mortgage.
— Compare Guide Interest Rates
Use the interactive comparison tools to compare guide interest rates from mortgage offers matching your criteria.
— Request a Mortgage Quote
Obtain a mortgage quote for the most cost-effective option, or apply directly for online mortgages.
— Negotiate with Leverage
You can also negotiate for a better mortgage deal with your preferred bank by referencing the most affordable advertised interest rates.
What Are Guide Interest Rates?
Guide interest rates are the publicly advertised mortgage interest rates provided by lenders.
These rates are typically offered without considering individual creditworthiness or property values.
Keep in mind that not all lenders publish guide interest rates, especially those with unfavorable mortgage rates.
It’s important to note that the actual mortgage interest rate you receive may differ from guide interest rates.
Factors like your creditworthiness and property collateral value can influence whether your interest rate is more or less than the guide rate.
Many lenders also allow for negotiation. Online mortgages typically offer the same rates as those advertised.
Understanding Fixed-Rate Mortgages
Fixed-rate mortgages are the most common mortgage type in Switzerland.
These mortgages feature a predetermined rate that remains constant throughout the entire mortgage term, usually ranging from 2 to 15 years.
Some lenders even offer 20 to 25-year fixed-rate mortgages.
With a fixed-rate mortgage, you know your annual interest cost from the start, ensuring predictability.
You benefit from the fixed interest rate even if market rates rise, but early termination can result in high penalty fees.
Understanding Adjustable-Rate Mortgages
Adjustable-rate mortgages offer flexibility but are less common in Switzerland.
They don’t have a fixed mortgage term, allowing for termination within three to six months.
However, Swiss adjustable-rate mortgages tend to be expensive, making them less ideal for regular use.
These mortgages are typically recommended as interim solutions.
Understanding LIBOR Mortgages
LIBOR (London Interbank Offered Rate) mortgages, often called rollover mortgages in Switzerland, have fluctuating interest rates based on the LIBOR index plus a lender’s markup.
These mortgages are suitable when market rates are low, as your rate automatically adjusts. If rates rise, so will your LIBOR mortgage interest.
Understanding SARON Mortgages
SARON (Swiss Average Rate Overnight) mortgages replace LIBOR mortgages in Switzerland.
They also have variable interest rates composed of the SARON rate plus a lender’s markup.
SARON mortgages offer advantages when interest rates are low or stable.
If interest rates rise, so will your SARON mortgage rate, potentially resulting in higher costs compared to a fixed-rate mortgage with a lower initial rate.
Understanding Construction Loans
A construction loan is used to finance property construction or renovations.
These loans come with interest payments and often require additional quarterly commissions or a one-time flat fee.
Generally, the interest rates on construction loans are similar to adjustable-rate mortgages, making them relatively expensive.
Once the construction is completed, construction loans are usually refinanced with a mortgage.
The Pros and Cons of Split Mortgages
A split mortgage is composed of multiple components, each being a separate mortgage with different models and terms.
Although they may help minimize risk, they can be costlier than using separate mortgages when interest rates are low or constant.
Split mortgages can also be complex, and potentially dependent on consultation services.
Split mortgages may make the process of negotiating interest rates more challenging.
Refinancing split mortgages can be difficult as well, as each component may have different terms.
Splitting mortgages is not recommended in most cases.
If you opt for a split mortgage, ensure that the terms allow you to terminate all components when the longest fixed-rate mortgage expires.
Mortgage Interest Rate Changes
The frequency of mortgage interest rate changes depends on the lender and mortgage model.
Adjustable-rate mortgages have seen little change in recent years.
Money market mortgages (LIBOR and SARON) see relatively frequent rate adjustments.
Fixed-rate mortgages are often adjusted daily.
Historical Mortgage Rate Trends
Historically, money market mortgages (LIBOR and SARON) and short-term fixed-rate mortgages have been the most affordable types of mortgages in Switzerland.
Negotiating Mortgage Offers
Lenders are open to negotiating mortgage interest rates, but online mortgages are typically less negotiable.
Your creditworthiness plays a significant role in negotiations, so obtaining quotes from various lenders can help you secure a better deal.
You can also leverage the guide rates available on moneyland.ch’s mortgage comparison as a negotiation tool.
Sticking to your desired terms and considering the full cost of the mortgage are important factors during negotiations.
Investing a few minutes in negotiating a lower interest rate can lead to significant savings.
Choosing a Mortgage Provider
Selecting a lender for your mortgage primarily depends on the total mortgage cost, favoring those with the lowest interest rates.
This is regardless of the fact whether they are banks, insurance companies, or pension funds.
Banks typically offer in-depth consultation as mortgages are their core business, which is not the case for insurance companies and pension funds.
Exploring Online Mortgages
Online mortgages, available through internet channels, offer lower average interest rates than conventional mortgages.
They are quick to apply for but require a good understanding of mortgages.
Negotiating interest rates is uncommon, and specialized mortgages are rarely offered online.
Cost of Swiss Mortgages
The cost of Swiss mortgages varies by type and lender. Adjustable-rate mortgages are relatively expensive for short-term financing.
Longer fixed-term mortgages tend to have higher interest rates, compensating for potential interest rate changes.
Costs can be calculated by multiplying the mortgage amount by the annual interest rate.
Loan Increases and Mortgage Term Extensions
Increasing the size of an existing mortgage usually comes with a fee, typically around 200 to 500 francs.
Extending a mortgage term may also incur fees, depending on the lender, ranging from 75 to 500 francs.
Discounts for Families, Initial Mortgages, and Energy-Efficient Housing
Some banks offer slight mortgage discounts for families, but family mortgages might not always be the most affordable.
Family mortgage limitations often apply to property type and mortgage type.
Initial mortgages, marketed as start discounts, may have restrictions.
Energy-efficient housing mortgages come with limitations concerning property type and mortgage type.
Investment, Holiday, and Senior Mortgages
Investment property mortgages have higher interest rates than self-occupied homes.
Holiday home mortgages typically have higher rates and tighter conditions.
Mortgage options for seniors are limited, but reverse mortgages provide solutions for income declines in retirement.
Loan-to-Value Ratios and Mortgage Affordability
The loan-to-value ratio determines how much of the property purchase is covered by a mortgage, requiring a down payment.
The maximum loan-to-value ratio under Swiss banking guidelines is 90%, but most banks set a maximum of 80%.
Affordability is assessed based on cost-to-income ratios, with a 33% limit on the annual costs relative to your income.
Renting vs. Mortgaging a Home
Affording a mortgage is not the sole consideration; renting may be financially favorable depending on your situation.
Non-Resident Mortgages
Most Swiss lenders do not accept non-resident mortgages, but exceptions exist for border regions if you earn income in Switzerland.
Early Mortgage Termination
Terminating a mortgage ahead of schedule is possible but costly, especially for long-term fixed-rate mortgages.
Renewing Your Mortgage
Extending your existing mortgage may not be the most financially sound choice.
Always compare current interest rates with those offered by other lenders to potentially save money.
Negotiating the terms with your current lender, backed by competitor offers, can be a useful strategy.
If another lender provides a cheaper mortgage, consider switching.
Bottom Line
I found the information regarding the best mortgage providers from certain reliable sources, yet you might find some others to be better.
That being said, I strongly hope that the information provided in the article helps you know the best mortgage providers in Switzerland.
If you are an expat or a high-net-worth individual seeking reliable wealth management services, you can feel free to contact me.
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
