Swiss Mortgage Rates in 2024: The Brutal Gap Between Benchmarks and Reality

If you’ve been shopping for a mortgage in Switzerland lately, you’ve probably noticed something infuriating: the glossy rate advertisements bear about as much resemblance to your actual offer as a brochure photo does to a Zurich WG-Zimmer in real life. In late 2024, the spread between published benchmarks and what customers actually secured widened into a chasm, and timing, as one frustrated buyer discovered, became everything.

The Rate Reality Check: What Buyers Actually Got

In November 2024, a prospective buyer on SwissPersonalFinance walked away from MigrosBank with a 1% SARON margin and a 5-year fixed offer at 1.4%. Sounds decent, until you compare it with what mortgage advisors were seeing. The same week, industry insiders reported that 5-year fixed rates should have been available from 1.15, 1.20%, and SARON margins as low as 0.65, 0.75% were still achievable for well-qualified clients.

That 0.3 percentage point gap on fixed rates and 0.25, 0.35 point difference on SARON margins isn’t trivial. On a CHF 800,000 mortgage, it translates to roughly CHF 2,000, 2,800 in extra interest annually. Yet the buyer’s experience wasn’t unusual. Another user reported being quoted 1.62% for a 10-year fixed from UBS, significantly above the 1.45, 1.50% benchmark that advisors cited as the market floor.

Why the disconnect? Banks have become increasingly selective, and the old rules about published rates apply only to pristine borrowers with flawless affordability metrics, substantial Eigenkapital, and perhaps a dash of luck.

The SARON Squeeze: Why Your Margin Suddenly Looks Fat

For years, savvy Swiss homeowners bragged about SARON margins below 0.7%. Those days are fading. The 1% margin from MigrosBank, while not terrible, reflects a broader trend of banks padding their risk premiums.

The math is stark. SARON itself hovers near zero (it tracks the SNB policy rate), so everything above that is pure bank profit. As one advisor explained, margins are flexible based on “how interested they are”, a polite way of saying how desperate they are for your business versus how risky they think you are.

The post-Credit Suisse landscape plays a role here. With CS gone, the remaining players face less competitive pressure and higher regulatory capital requirements. They’re passing those costs directly through wider margins. The 0.6% SARON deals of 2021 have become unicorns, today’s reality is 0.85, 1.0% for most borrowers, with only the most attractive profiles cracking the 0.7% barrier.

Fixed-Rate Roulette: When Timing Bites Back

Timing is the silent assassin of mortgage planning. One buyer lamented passing up a 10-year fixed at 1.4% just two months earlier, only to watch rates climb before finding a new property. That’s not bad luck, it’s the market’s new volatility.

Between March and December 2024, 10-year fixed rates dropped from over 2% to 1.74% according to Comparis data, then started creeping up again. This whipsaw pattern makes forward planning excruciating. Want to lock in today’s rate for a purchase closing in 12 months? Expect a Forward-Zinsaufschlag of roughly 0.1 percentage points, cheap insurance if rates rise, wasted money if they fall.

The real kicker? Even when rates dropped, not all banks passed savings through equally. UBS’s 1.62% quote in late 2024 looked suspiciously high when smaller banks were offering 1.45, 1.50%. It’s a reminder that brand premiums and risk models vary wildly between institutions.

The Sleep-At-Night Test: Can You Afford Your SARON Bet?

Here’s where theory collides with reality. The VZ Vermögenszentrum has long recommended SARON, and data backs them up: from 1993, 2024, SARON was cheaper than 5- or 10-year fixed in nearly every 10-year period. But “cheaper on average” offers cold comfort when your monthly payment spikes.

Consider the CHF 1 million mortgage example. At the current SNB rate of 0%, your SARON mortgage costs CHF 9,000 annually (assuming a 0.9% margin). If the SNB hikes back to 1.75%, where it sat in mid-2023, your interest jumps to CHF 26,500. That’s an extra CHF 1,458 per month, overnight.

The test, as one advisor put it, is whether you’d “still sleep soundly if rates hit 4 or 5 percent.” Most Swiss borrowers would not. This psychological reality is pushing more buyers toward fixed rates, even at a premium. The 0.5 percentage point gap between 10-year fixed and SARON (down from the historical 1.0 point average) suddenly looks like cheap insurance.

Looking Ahead: The 2026 Shadow

The SNB’s recent decision to hold rates at 0% dominated headlines, but the real story is in the forward guidance. Analysts now forecast a potential cut to -0.25% in the first half of 2026. For SARON holders, that means possible relief, eventually. SARON mortgages adjust immediately to SNB moves, but the central bank moves glacially.

Meanwhile, the fixed-rate market prices in long-term expectations, not just next year’s SNB policy. The current 1.45, 1.50% benchmark for 10-year fixed reflects market skepticism that rates will stay low forever. It’s a bet on inflation, global economic recovery, and the SNB’s own credibility.

For buyers closing in 2025, this creates a strategic dilemma. Lock in a 10-year fixed now and you’re paying a modest premium for certainty. Float with SARON and you’re gambling that the SNB’s next move is down, not up, and that your bank doesn’t widen your margin further.

The Bottom Line: What to Actually Do

Forget the generic advice. Here’s what the 2024 data tells us:

• If you’re risk-averse and your budget is tight, the 10-year fixed at 1.45, 1.50% is your friend. The 0.5 point premium over SARON is historically low insurance. Sleep matters.
• If you have flexibility and can absorb a 2, 3 percentage point rate hike, SARON at 0.75, 0.85% margin likely saves money over a decade. But negotiate hard, anything above 0.9% is lazy banking.
• If you’re buying in 6, 12 months, consider a forward rate. The 0.1 point premium is negligible compared to the risk of waiting.
• And whatever you do, shop beyond your house bank. The 0.3, 0.4 point spread between UBS and smaller lenders is real money. In Switzerland’s concentrated banking market, loyalty is expensive.

The mortgage market in 2024 isn’t just about rates, it’s about banks managing their own risk appetites while borrowers try to guess the future. The winners are those who benchmark ruthlessly, negotiate aggressively, and choose the product that matches their sleep threshold, not just their spreadsheet.