A number of Swiss banks have chosen to increase their mortgage interest rates for people buying a house in Switzerland. While the Swiss National Bank (SNB) has been more hesitant in raising its national interest rates, commercial banks expect mortgage costs to rise significantly over the next year.

Mortgage interest rates rise sharply in Switzerland

An investigation by Tamedia has shown a large increase in the cost of fixed-rate mortgages in Switzerland. In 2021, the interest rate for a five-year mortgage from the Luzerner Kantonalbank rose by 0,19 percentage points to 1,4 percent. 

The trend is not isolated to Lucerne, with mortgage interest rates from Raiffeisenbank, Credit Suisse and Zürcher Kantonalbank all registering significant rises. A study by moneyland.ch has confirmed that the average rate has risen sharply by up to 0,8 percent in the last year alone.

Swiss National Bank expected to raise interest rates

Felix Oeschger, an analyst for moneyland.ch, predicted that the Swiss National Bank (SNB), like the European Central Bank and US Federal Reserve, will be compelled to raise national interest rates as inflation continues to rise, which in turn will have a knock-on effect on mortgages. Credit Suisse expects the SNB to raise general interest rates twice in the next year, from minus 0,75 to 0,5 percent.

For families that are looking for a mortgage, Oeschger highlighted the major differences that remain between mortgage providers, with the gap in interest rate between the cheapest and most expensive 10-year fixed-rate mortgage being 0,69 percent. The advice from moneyland.ch is to look into online mortgages, which are starting to cost significantly less than regular ones.