Mortgage Tools Mortgage Interest Rates Likely to Remain Low in 2017, Despite Recent Rate Rises  

Mortgage Interest Rates Likely to Remain Low in 2017, Despite Recent Rate Rises  

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Source: Credit Suisse, Datastream“. Last data point: 12/01/2017

January 12, 2017: The Swiss economy is likely to grow by 1.5% in 2017, roughly the same pace as last year. An increasing number of export sectors are regaining their competitiveness, although the domestic economy lacks growth drivers. Downside risks persist, with growth heavily dependent on the future direction of the Swiss franc and the European economic situation. The rate of inflation is likely to return to positive territory in 2017, although at an expected 0.5% it will remain at a low level. This will allow the Swiss National Bank (SNB) to continue putting the development of the Swiss franc at the forefront of monetary policy. The SNB is therefore likely to leave its target band for key interest rates at between –1.25% and –0.25% over the coming 12 months. On that basis we expect interest rates for Flex rollover mortgages to remain at their current all-time low for the next 12 months as well. After having risen noticeably following the US presidential elections, interest rates for Fix mortgages with a medium or long term underwent another slight downward correction at the end of 2016. We expect interest rates for mortgages with a medium or long term to show a slight rise of 10 to 15 basis points from their current level in the 12 months ahead. A sideways movement is anticipated in the case of mortgages with a short term. As in recent weeks, however, temporary fluctuations in either direction must once again be expected in 2017 for all maturities.

  Interest rate
Forecasts for
  12.01.2017 3 mths 6 mths 12 mths
Flex rollover mortgage1
1.02 1.02 1.02 1.02
Fix mortgage (3 years)2
1.04 1.05 1.05 1.05
Fix mortgage (5 years)2
1.26 1.30 1.30 1.30
Fix mortgage (10 years)2
1.81 1.90 1.90 1.95
Fix mortgage (15 years)2
2.20 2.30 2.30 2.35

The interest rates listed are indicative values and apply to top-quality residential property and borrowers with impeccable creditworthiness.

1 Flex rollover mortgage (framework term three years). Interest rate based on three-month CHF LIBOR. Interest rate adjusted every three months.
2 Fix mortgages. Fixed term and interest rate for the entire term.