Because there is no competition: mortgage interest rates are no longer falling

Mortgage interest rates in Switzerland are still very low. Interest rates for shorter and longer terms have converged even more in the third quarter of 2020, as shown by the mortgage barometer of the comparative portal Comparis.

Reference interest rates for short, medium and long-term fixed rate mortgages measured in the comparison barometer fell slightly in this country in the third quarter. For the ten-year period it is 1.05 after 1.11 percent in the second quarter, for five years it is 0.91 after 0.95 percent and for two years it is 0.86 after 0.89 percent.

Information from the Comparis mortgage barometer is based on benchmark interest rates from more than 50 banks. In the quarter under review, the gap between five-year and ten-year mortgages narrowed, writes Comparis. A similar evolution can be observed in the comparison of prices of mortgages to ten or two years, where the differential of interest rates also decreased.

And the sideways trend will continue in the coming months: mortgage interest rates will stagnate at a low level, believes Comparis financial expert Frédéric Papp, according to the announcement. “Among other things, there is a lack of competitive pressure for a further significant drop,” Papp said.