Mortgage interest rates are on a downward spiral

towards the end of last year, have reduced the prices of mortgage in Switzerland again. This is true in particular for fixed-rate mortgages with a term of five years: The indicative interest rates have fallen to historical low values. At the same time, increased demand for one - to three-year mortgage loans noted in the fourth quarter, as there will be two published notices of the online comparison services, Comparis, and money country.

For ten-year fixed-rate mortgages, the average indicative interest rate in the fourth quarter of 2018, according to the Comparis at 1.46 percent, compared with 1.67 percent in the third quarter. Customers with the highest credit rating could take out such a mortgage is already at 0.99 percent, say it in the message.

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money a country has been calculated for ten-year maturities by the end of 2018, with an average interest rate of 1.47 per cent, to 1.7 per cent by the middle of October. Until Monday, the interest rate has reduced further to 1.45 percent; over the last three months, an interest rate, this resulted in decrease of 15 percent.

The benchmark interest rate for five-year mortgages is gone, according to the Comparis from the third to the fourth quarter, from 1.13 to 1.04 per cent on the previous all-time low of 2017. Money country recorded a reduction from 1.19 to 1.05 percent, and up to the Monday a further slight decline of 1.04%. "It has never been so affordable mortgages with shorter maturities," says money of the country, the managing Director of Benjamin Manz.

are Hesitate at the Central banks

A major reason for the declining trend of Interest rates, according to a statement by Frédéric cardboard, a financial expert at Comparis for 2018/2019 downward revisions in growth forecasts both for Switzerland as well as for the Euro area. Cardboard also refers to the recently published by the world Bank economic Outlook, according to which is to be expected in all major markets with a slowdown in the economy. This environment – which has in comparison to the summer felt gloomy – is likely to result in the Comparis-expert, "that the Central banks will raise interest rates less quickly than we thought".

If, in particular, the European Central Bank in the second half of 2019 first interest-rate increase, given the rapidly growing economic slowdown in our neighbouring countries is an open question. The Euro Central Bank to delay such a step, remains of the national Bank with respect to the continuing high Frank assessment no other choice than to also wait. In this scenario, the first interest would move a step in this country to (far) for the coming year. This Background may explain why short-term mortgages with up to a three-year term enjoyed in the fourth quarter of 2018 increased popularity. Their share in total mortgage volume increased from 3.6 percent in the third quarter to 4.8 percent. Obviously the mortgage borrowers have moved increasingly into debt in the short term and to benefit from the attractive interest rates (average in the fourth quarter: 0.95 per cent).

Hard

negotiating link At the end of this mortgage, the calculus, then the time came, in good time prior to the delayed General interest of the favorable conditions rise by means of long-term debt. From the point of view of Frédéric cardboard, it is but a "pretty speculative" strategy – suitable only for mortgage debtors who were able to bear certain risks. Because the interest rates should tighten prematurely, you run the risk of the refinancing in at least three years of higher costs.

in Addition to the economic situation has, as Benjamin Manz, "the increased competition between the providers," fumes an interest. Especially Mortgage brokers and online mortgage would have ratcheted up competition in Switzerland. The borrowers are thus in a good negotiating position "and that you should use before the conclusion of the contract", adds the money to the country managing Director. Over several years, so a five-digit sum could be saved.

(editing Tamedia)

Created: 15.01.2019, 21:48 PM