Real estate – the Swiss are now looking for 15-year mortgages


Published

Mortgages for long-term home purchase are becoming increasingly popular in Switzerland, as the mortgage barometer of the comparison portal Comparis shows.

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For many Swiss, the first step towards owning a home is a mortgage.

Landbote / Marc Dahinden

Long-term mortgages in particular have become increasingly popular in recent years.

Long-term mortgages in particular have become increasingly popular in recent years.

20min / Simon Glauser

According to comparis.ch, this trend is likely to continue.

According to comparis.ch, this trend is likely to continue.

comparis.ch

  • In the fourth quarter of 2021, comparis.ch again recorded an increase in long-term mortgages.

  • Because individual mortgage institutions are now foregoing early repayment penalties, short-term terms lose their flexibility.

  • The comparison portal does not anticipate rising interest rates for the time being.

The benchmark interest rates for fixed-rate mortgages rose significantly at the beginning of the fourth quarter of 2021 due to fears of inflation. This is what the comparison portal Comparis writes on the basis of data from HypoPlus, the mortgage specialist in the Comparis Group. The fears that arose in November that economic growth could stagnate, however, sent interest rates down again, so that in some cases they even hit quarterly lows.

Trend should continue

The comparison portal predicts that the preference for long and even ultra-long terms of up to 15 years observed in the last quarter is likely to continue in 2022. “The reason for the growing popularity of long mortgage contracts is not only the expected slight increase in interest rates in the second half of the year, but also an innovation in the mortgage market: some mortgage institutions have abolished the prepayment penalty,” explains Comparis financial expert Leo Hug.

Rising interest rates unlikely

Rising interest rates are not expected for the time being. According to the annual forecast published by Comparis in December, mortgage interest rates in spring 2022 are likely to be in the range of the previous quarter. A slight upward pressure on mortgage interest rates is only becoming apparent in the second half of the year.

For the projections, Comparis calculated the average interest rate differences between fifteen, ten, five and two-year mortgages in the fourth quarter and determined the savings potential over the entire term, as the comparison portal writes in its announcement.

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