In March 2023, Swiss fixed-rate mortgages were trading at their highest level this year. Last year's peak could soon be surpassed. This is because inflation has not yet been tamed.
The year 2023 began with a significant drop in interest rates for Swiss fixed-rate mortgages. But since February, fixed-rate mortgages are becoming more expensive again and are not far from the high in October 2022. "At 2.95% for 5-year and 3.08% for 10-year fixed-rate mortgages, moneyland.ch's mortgage index is currently trading at its highest level this year," Felix Oeschger, mortgage expert at moneyland.ch, explained in mid-March. In fact, there are increasing signs that mortgage rates will continue to rise for the rest of 2023.
Inflation figures are higher than expected
Last year's unusually high inflation forced Western central banks to take aggressive interest rate steps and ultimately also drove Swiss fixed-rate mortgages to a temporary high in October 2022. In recent weeks, fears that inflation had not yet been tamed have again become entrenched. In January 2023, for example, inflation according to the Swiss national consumer price index was higher than in the previous month for the first time since August 2022. The inflation figures for February 2023 were also higher than expected at plus 3.4%.
Interest rates continue to rise
In January, most market observers assumed that the Swiss National Bank SNB would raise the key interest rate to a maximum of 1.5% this year with one or two interest rate steps. Now, however, the SNB has already raised the key rate to 1.5% at the end of March and at the same time announced that it would tighten monetary policy further. It is not ruling out additional interest rate hikes.
Higher mortgage rates are likely
This makes it clear that an even higher interest rate level is likely. "This will also have an impact on mortgage rates. I expect interest rates on Swiss fixed-rate mortgages to exceed the 2022 highs this year," concludes Oeschger.
And how does that affect individual mortgages? Read more about this in our next blog.
About the Mortgage Index
The mortgage index of moneyland.ch is based on the benchmark interest rates published online, which moneyland.ch automatically collects twice a day. For ten-year fixed-rate mortgages, the index corresponds to the daily average of the interest rates of over 30 banks and insurance companies. In addition, benchmark interest rates are indexed for fixed mortgages with further maturities, variable mortgages, construction loans and Saron mortgages.