Due to the current situation, many homeowners are uncertain about how the interest rate situation will develop and what
They shall make. Because sooner or later the decision must be made, with which mortgage one wants to continue financing in the future.
Due to the interest rate discrepancy between the fixed-rate mortgage and the Saron mortgage, many customers ask us whether it is better to opt for a fixed-rate mortgage
should, or whether you are better off, as historically correct, with the Saron Mortgage.
What existing and future property owners need to be aware of when applying for a mortgage
Due to the interest rate differences, we speak from the point of view of the financial burden, of a serious decision.
If you have a 10-year fixed-rate mortgage for an amount of CHF 860,000.- borrow, this means at the current interest rates of 1.95 % that you have annual interest costs of CHF 16,770.- or CHF 1,397.50 per month. In contrast to this, the Saron mortgage with an average margin of 0.6%, resulting in an annual interest charge of CHF 5,160.- or CHF 430.- per month leads. However, as is often the case, there are two sides to the coin, because the interest rate on the Saron mortgage is constantly adjusted. The duration of the mortgage is usually between three to five years, although it is also possible to change within the financing institution before the end of the term of the Saron mortgage in a fixed mortgage. The interest rate of a Saron mortgage is composed of the Saron rate, currently -0.71 % (09.05.2022) and the margin. The financing bank or insurance company determines the margin based on certain risk factors, such as the customer's creditworthiness and the quality of the property.
Historically, the Saron mortgage is almost always cheaper because the interest rate only includes the margins explained above. With a fixed rate mortgage, the situation is different, because here, among other things, the general trend in the money and capital markets at the time of the conclusion is also added.
Of course, there are also times when it makes more sense and may even be cheaper in the long run if you choose a fixed-rate mortgage. Because in December 2021 you have a ten-year fixed mortgage for 0.63 % get. These are interest rates we dream of today. For this reason, it is always necessary to consider the decision situationally.
Despite the current uncertainty about interest rate trends, it's important to remember that historically we still have very favorable interest rates for fixed-rate mortgages. You can see this very impressively in the chart above.
When negotiating the interest rate with the financing institution, it is important to negotiate well and not just ask your own house bank. For this reason, we work together with various mortgage providers to find the optimal offer for our customers. Regardless of this, you can assume that when it comes to financing:
– The more attractive the customer is in his initial situation, the better interest rates he will normally be offered.
Thus, it is important not only to compare, but to position yourself positively. This makes you more "interesting" to banks.
A fixed-rate mortgage provides financial security, while the Saron mortgage offers flexibility.
Which way is the right one has to be checked individually based on the current and future life situation, those who have a tight budget now should rather go for a longer-term fixed mortgage, but those who want a certain flexibility and can cope with a possible increase in interest rates can well consider doing the Saron mortgage.
Of course, it can also be exciting to make various mortgage tranches, in which a longer fixed mortgage is combined with a Saron mortgage.
Mortgage calculator
Using our mortgage calculator, you can find out within seconds a binding interest rate, which we can offer you at this time through our various mortgage partners.