Mortgage Tools Mortgage Interest Forecast

Mortgage Interest Forecast

Mortgage interest rates are currently at a record low. This is a good starting point for a borrower. Our forecasts are valuable tools for selecting mortgage models and terms. You can have our monthly mortgage interest forecast sent to you regularly by newsletter.

Monthly Mortgage Interest Forecast

Ups and Downs in Fix Mortgage Interest Rates Likely to Continue

December 1, 2016: The development of mortgage interest rates in recent weeks has been shaped by the outcome of the US presidential elections. The resulting optimism about US growth has been reflected globally in a rise in (government) bond yields and therefore higher mortgage interest rates in Switzerland. The economic situation in Switzerland and Europe is likely to move center-stage for the development of mortgage interest rates in 2017. We expect economic growth to accelerate to 1.5% next year, although this means growth will still be weaker than it was before the jump in the value of the Swiss franc. 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 target band for key interest rates is likely to remain between –1.25% and – 0.25% over the next 12 months. We therefore expect interest rates for Flex rollover mortgages to remain at their current all-time low. 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 November. 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. A sideways movement is expected 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
  30.11.2016 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
1.25 1.25 1.25 1.25
Fix mortgage (10 years)2
1.80 1.90 1.90 1.90
Fix mortgage (15 years)2
2.19 2.30 2.30 2.30

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.

The table shows how different the interest burden can be depending on the type and term of the mortgage. The forecasts show the prospects for possible developments of the mortgages over 3, 6, and 12 months. A sideways trend is anticipated for the Flex rollover mortgage over the next 12 months. The interest rates for long-term Fix mortgages are likely to increase by 20–45 basis points.