Real Estate: Fixed-rate mortgages are unlikely to get much cheaper

Fixed-rate mortgages in Switzerland are unlikely to become much cheaper for the time being. According to Comparis, conditions in the capital markets point toward stable to slightly higher benchmark interest rates.

While the domestic environment remains comparatively favorable—with moderate inflation, a robust economy, and the Swiss National Bank’s accommodative monetary policy—rising long-term yields are preventing a significant drop in mortgage rates, the comparison service noted in a statement on Thursday.

As of June 8, benchmark rates for 10-year fixed-rate mortgages stood at 1.86 percent. This is slightly lower than at the start of the year. At the same time, yields on 10-year government bonds have risen, while banks’ refinancing costs have remained largely unchanged.

According to Comparis, high government debt in the U.S. and Europe, as well as geopolitical risks, are having a particularly negative impact. If tensions in the Middle East escalate, energy prices and inflation expectations could rise again. Mortgage borrowers should therefore not count on significantly lower interest rates, Comparis financial expert Dirk Renkert is quoted as saying. A significant decline is only likely in the event of an unexpectedly sharp economic slowdown.