Mortgage rates in Switzerland continued to fall slightly in August. However, according to Moneypark, the decline was significantly lower compared to the development in capital market rates. The mortgage broker accordingly expects a bottoming.
In concrete terms, the benchmark for 10-year fixed-rate mortgages fell by 10 basis points (BP) to 1.08 percent at the end of August compared to the end of July, Moneypark announced on Wednesday. Customers with good credit ratings can even lower rates. According to the analysis, interest rates of 0.60 percent were determined for the renegotiated values.
The average benchmark for 5-year fixed mortgages also fell in August, by 2 bp to 0.94 percent. The value for two-year mortgages fell 3bp to 0.91% last month.
However, the swap rates have dropped significantly more sharply in August, such as the 10-year-old by 26 basis points. Moneypark says the lower decline in hypo rates is because institutions have either used the market to extend or secure their margins, or the minimum rate defined by providers has been reached.
Expected key rate cuts
Moneypark does not believe that mortgage rates are falling any further. At the moment, all indicators point to slightly lower capital market interest rates. Another key interest rate cut by the European Central Bank is already communicated in a conglomerated manner for September. And depending on the development of the strength of the Swiss franc, there is a high likelihood that the National Bank (SNB) will also taper.
However, a further reduction in money market rates will probably not have a major impact on mortgage rates, it says. At least as long as none of the providers strongly undercuts the competition, mortgage interest rates are likely to stagnate at the current level, so Moneypark.
The mediator's forecast for the ten-year fixed-rate mortgages is expected to be between 0.97 and 1.17 percent by the end of the year. (SDA / JFR)