Mortgage interest rates in Switzerland fall to two-year low

By Jan de Boer

The average interest rate for mortgages in Switzerland has fallen to a two-year low, according to a new report from Moneyland. While the news means that buying a house is set to be cheaper than renting over the long term, the lower rates are expected to cause price hikes for property.

Mortgage interest rates fall quickly in Switzerland

Average mortgage interest rates in Switzerland have continued to fall from the peaks they achieved in 2022 and 2023. According to Moneyland, the average interest rate for a two-year fixed-rate mortgage now stands at 1,81 percent, at 1,79 percent for five-year deals and 1,9 percent for 10-year deals, rates unseen since March 2022.

Moneyland analyst Felix Oeschger noted that fixed rates for long-term deals have dropped by up to half a percentage point in just three months - in June 2024 rates for two, five and 10-year mortgages stood at 2,31, 2,33 and 2,42 percent respectively. The falling rates are seen as a response to falling inflation, and the Swiss National Bank’s subsequent decision to cut the key interest rate to 1,25 percent in June 2024.

What Swiss homebuyers need to know about the lower rates

What does this mean for those looking to buy a house in Switzerland? Speaking to 20 Minuten, chief economist at Raiffeisen Fredy Hasenmaile and Donato Scognamiglio from real estate consultancy Iazi said they expect the lower rates to trigger a wave of house buying. “The cost advantage of owning a property has returned and "buying" is now cheaper than "renting". As a result, we expect prices to grow somewhat faster in the medium term,” Hasenmaile predicted.

Scognamiglio explained that for those with fixed-rate plans - the type of Swiss mortgage used in 80 percent of deals - the lower rates will only benefit homeowners when their contract comes to an end and they refinance. Those on interest rate-tied Saron mortgages will see lower rates arrive much sooner.

Will renters be impacted by lower interest rates in Switzerland?

There is good news for those who rent a house or apartment in Switzerland: Hasenmaile noted that lower mortgage rates should lead to a drop in the reference interest rate by March 2025 at the latest. This means that following the automatic rent rises seen last year, tenants on existing rental contracts will finally be able to apply for a rental reduction - though the lower rates will have no impact on new tenancies.

Looking ahead, Moneyland noted that with the Swiss National Bank expected to cut rates again in both September and December, interest rates for mortgages will “remain constant or even fall."

"However, economic and geopolitical risks remain elevated, and the scenario of a significant economic slowdown cannot be completely ruled out," Oeschger noted. If this happens, mortgage rates are expected to drop even further.

Thumb image credit: Michal Stipek / Shutterstock.com

Never miss a thing!Sign up for our weekly newsletters with important news stories, expat events and special offers.
Keep me updated with exclusive offers from partner companies
By signing up, you agree that we may process your information in accordance with our privacy policy
follow us for regular updates:

Jan de Boer

Editor at IamExpat Media

Jan studied History at the University of York and Broadcast Journalism at the University of Sheffield. Though born in York, Jan has lived most of his life in Zurich and has worked as a journalist, writer and editor since 2016. While he has plunged head-first back into life in Switzerland since returning to the country in 2020, he still enjoys a taste of home at pub quizzes and karaoke nights.Read more

For expats of all colours, shapes and sizes

Never miss a thing!Sign up for expat events, news & offers, delivered once a week.
Keep me updated with exclusive offers from partner companies
By signing up, you agree that we may process your information in accordance with our privacy policy

© 2025 IamExpat Media B.V.