Savings accounts, consumer prices, real estate What the SNB's interest rate cut means for you
The Swiss National Bank (SNB) has lowered its key interest rate again: by 0.25 percentage points to 1.00 percent. This move was expected: What do low interest rates mean for you?
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- The SNB has lowered the key interest rate for the third time this year - to 1.00 percent.
- The loose monetary policy has an impact on consumers and savers.
- The real estate market could also be set in motion.
By lowering the SNB key interest rate by 0.25 percentage points to 1.00 percent, the SNB is continuing its interest rate turnaround and further easing its monetary policy.
Such a move had been widely expected on the market, even though there had recently been voices suggesting that a major move of 0.5 percentage points along the lines of the US Federal Reserve was possible.
Overall, this is already the third easing move by the monetary authorities this year. The SNB was the first of the major central banks to herald a turnaround in interest rates back in March, cutting its key interest rate by a quarter of a percent.
What does the SNB's interest rate cut mean for consumers?
The prices of food and other products are based on inflation. This is falling in Switzerland. This means that prices are falling or no longer rising as sharply. This is due not least to the strong franc, lower oil prices and forthcoming electricity price cuts.
Falling inflation is one of the main reasons why the SNB has lowered the key interest rate again.
What does the SNB's interest rate cut mean for home buyers and sellers?
A reduction in the key interest rate normally also results in a reduction in the mortgage rate. The decisive factor here is whether a fixed or variable interest rate was chosen for the mortgage. New mortgages are likely to become cheaper again in the future. As a result, more people will be able to afford their own property again, despite the general rise in prices.
What does the SNB's interest rate cut mean for homeowners?
A reduction in the key interest rate on the housing market could lead to increased demand due to cheaper mortgages. This in turn would result in rising prices and thus an increase in the value of Swiss real estate.
What does the SNB's interest rate cut mean for tenants?
The lowered key interest rate has no impact on rents for the time being. It is independent of the reference interest rate for rents, which remains at 1.75 percent. In the long term, a reduction in the key interest rate will lead to lower rents because mortgages will become cheaper overall. Rents are currently not expected to fall until 2025.
What does the SNB's interest rate cut mean for savings accounts?
The lower the key interest rate, the less worthwhile it is to save. When the SNB lowers the key interest rate, banks also tend to lower interest rates on savings accounts. Other forms of investment, such as shares, become more worthwhile again.
What does the SNB's interest rate cut mean for the Swiss franc?
Interest rate cuts by the SNB normally lead to a devaluation of the Swiss franc. Our currency therefore becomes weaker. Imported goods can become more expensive as a result.
What does the SNB's interest rate cut mean for the economy?
The SNB's interest rate cut is likely to have a positive effect on the export industry in particular. Because the Swiss franc is now tending to weaken, Swiss products are becoming cheaper for buyers abroad.
Will there be further interest rate cuts by the SNB in the near future?
The SNB is clearly concerned about rapidly falling inflation. It is therefore already forging ahead: Further interest rate cuts may be necessary in the coming quarters in order to ensure price stability in the medium term. The central bank rarely speaks so clearly. At the same time, the SNB is still prepared to be active on the foreign exchange market if necessary.
