(Financial) services Demand for long-term fixed-rate mortgages unabated
Long-term fixed-rate mortgages remained in high demand in the fourth quarter. According to the comparison portal Comparis, four out of five mortgage borrowers opted for this type of financing for their home.
09.01.2025, 08:15
SDA
"In addition to high planning security, attractive conditions are likely to have contributed to this decision", says Comparis financial expert Dirk Renkert in a press release issued on Thursday. In the fourth quarter, around 77 percent of Comparis mortgage partner HypoPlus customers opted for a fixed-rate mortgage with a term of 10 years or longer. In the previous quarter, the proportion was already around 70 percent, compared to just 40 to 50 percent in the first two quarters of 2024.
In the case of medium terms (4 to 6 years), the proportion of deals was around 11% after around 14% in the previous quarter. In the second quarter, the share was still around 30 percent. The proportion of mortgages with a term of up to three years (including Saron) remained virtually unchanged compared to the third quarter at 7%. Saron mortgages accounted for around 4 percent of this figure.
Fixed-rate mortgage vs. Saron
With the key interest rate cut by the Swiss National Bank (SNB) in December, Saron mortgages became significantly cheaper and are now only more expensive than fixed-rate mortgages with a medium term, as Comparis writes further. Ten-year fixed-rate mortgages were recently offered for an average of around 1.1 to 1.7 percent, while Saron mortgages cost around 1.1 to 1.6 percent after the interest rate cut.
Saron mortgages have thus become around 1.25 percentage points cheaper following the four prime rate cuts this year. Five-year fixed-rate mortgages recently traded at around 1.0 to 1.5 percent.
"Nevertheless, fixed-rate mortgages are trading at a very attractive level. Anyone looking for planning security at attractive conditions is well served with fixed-rate mortgages. For those who can bear the risk of interest rate changes and believe that interest rates will continue to fall, Saron mortgages are probably more suitable," says Renkert from Comparis.
The reference interest rates for ten-year fixed-rate mortgages published by over 30 credit institutions - these are reference values - stood at 1.63 percent at the end of December 2024, compared to 1.81 percent at the end of September, according to the report. However, the best interest rate actually negotiated for a ten-year fixed-rate mortgage was just 1.15 percent.
The benchmark rate for five-year fixed-rate mortgages even fell to 1.44 percent from 1.68 percent at the end of the year. At the start of 2024, the benchmark rates for ten-year and five-year fixed-rate mortgages were still 2.26% and 2.12% respectively.
