SARON or Fixed-Rate Mortgage? The Right Strategy for Your Financing
Choosing the right mortgage significantly determines your monthly burden and financial flexibility.
The Interest Rate Binding Dilemma
In Switzerland, homeowners often face the question: security at any price or take the risk of fluctuating interest rates? Those who commit for too long miss possible rate cuts. Those who only rely on short-term models can quickly reach their budget limits with rapidly rising rates. Without a clear strategy, financing becomes a gamble.
Expert Tip: The mix makes the difference. Don't put all your eggs in one basket. A proven strategy is splitting: Divide your mortgage into two or three tranches with different terms and models (e.g., 50% SARON, 50% fixed-rate). This smooths the interest rate risk and keeps you partially flexible.
The Models in Direct Comparison
- Fixed-rate mortgage: Offers full budget security over the entire term (e.g., 10 years). Ideal for security-conscious borrowers when rates are historically low.
- SARON mortgage: Based on the money market. Historically often the cheapest option, but requires some risk capacity with rising market rates.
- Framework agreement: With SARON models, pay attention to notice periods and the option to switch to a fixed-rate mortgage at any time.
Conclusion
There is no "perfect" mortgage – only the one that matches your personal risk tolerance.
Frequently Asked Questions
3 answers about this topic
When you expect rising interest rates or need a fixed budget size for the coming years without wanting to experience surprises.
Yes, but this usually comes with a very high prepayment penalty. Careful planning is essential here.
Banks typically require at least 20% equity, of which at least 10% must be so-called "hard equity" (i.e., not from pension fund early withdrawals).
Author
Adis Kavazovic
Head of Insurance & Financial Planning
Personal Consultation
Our experts help you with your individual questions.