Recently, banks have slightly lowered the rates for short-term mortgages but increased those for long-term ones. This shift is reflected in the average offer rate, which, according to the December Swiss Life Hypoindex, stands at 6.02 percent, a marginal increase from the previous month. Interestingly, the November mortgage monitor directly from the banks had shown an average rate of 5.71 percent.
From an overall perspective, mortgage rates remain stable. “For the ending year 2023, it holds for the mortgage market that how it started, so it ends,” summarized analyst Jiří Sýkora from Swiss Life Select.
The monthly payment of an average mortgage of 3.5 million crowns, contracted to 80 percent of the property price with a maturity of 25 years and an average offer rate of 6.02 percent, amounts to 22,589 crowns, according to the December Hypoindex. In annual comparison, it only fell by 685 crowns.
The most expensive are mortgages for young people with a ten-year fixation. The rates for five-year fixations range from 5.8 to 6.14 percent. Interest rates for mortgages fixed for ten years are offered to young applicants up to 36 years for 6.39 percent and others for 6.05 percent.
The reason behind the price increase of ten-year fixations also lies in the recent approval of the amendment to the Consumer Credit Act. From January next year, the fee for early repayment of mortgages will increase. Banks will now be able to charge a quarter of a percentage point annually but a maximum of one percent of the unpaid principal. However, according to banks, the fee is insufficient to cover their risks. It can, therefore, be expected that ten-year fixations will experience a significant decline in the coming years.
As per some experts, two percent mortgages are a thing of the past and will not repeat. In the coming year, mortgage rates should decrease, but they will not reach the level of previous years.