New figures show These mortgages are particularly popular now

Thanks to low interest rates, mortgage borrowers in Switzerland are once again opting for very specific terms. This is shown by new figures.

Keystone-SDA

28.01.2025, 09:06

28.01.2025, 09:26

SDA

Mortgage borrowers in Switzerland increasingly opted for longer terms again in the second half of 2024. Thanks to the low interest rate environment, ten-year terms were chosen for more than half of mortgages.

Thanks to the lower interest rates, ten-year fixed-rate mortgages accounted for 51 percent of the mortgage volume brokered, according to the "Financing and Real Estate Update" published by Moneypark on Tuesday.

During the low-interest phase in 2020 and 2021, the share of ten-year fixed-rate mortgages was still slightly higher, but then fell to below 30 percent.

Saron no longer first choice

Despite two further key interest rate cuts in the second half of the year, Saron mortgages were no longer the first choice, according to the study. The current extremely low interest rates have led to significantly more fixed-rate mortgages with terms of ten years or more being taken out.

This is even more evident in French-speaking Switzerland than in German-speaking Switzerland. In French-speaking Switzerland, 62 percent of mortgages had a term of ten years or longer, compared to 51 percent in German-speaking Switzerland and 55 percent overall. Across Switzerland, the number of contracts with these terms increased by around a third compared to the first half of the year.

By comparison, Saron mortgages still accounted for 7 percent in the second half of the year, mortgages with short terms of 1 to 4 years 10 percent and those with medium terms of 5 to 9 years 28 percent.

Banks take back market share

Among mortgage providers, there has also been a shift in favor of banks and away from pension funds. After a cautious first half of the year, the bank provider group proved to be more active in the second half of the year, according to the report.

With attractive conditions, they have significantly increased their share of the brokered volume, particularly in German-speaking Switzerland. Specifically, the proportion of mortgages brokered by banks rose to 60 percent in the second half of the year from 51 percent in the first. At the same time, the share of pension funds halved to 9%. The share of insurers remained unchanged at 31 percent.

Many pension funds have successfully achieved their target volume in recent years, according to the statement. Their growth ambitions for 2024 had already been achieved in the first half of the year, meaning that they were much more cautious in the second half of the year.