Mortgage Radar – December 2025

Interest rates at the long end are continuing to fall

In its September monetary policy assessment, the Swiss National Bank (SNB) left the key interest rate unchanged at 0.00%. While the agreement with the US to reduce tariffs on Swiss exports may provide some relief, the economic environment remains challenging. Monetary policy continues to be shaped by low inflation and a strong Swiss franc.

At present, the SNB sees no reason to return to negative interest rates. Accordingly, the policy rate is expected to remain stable at 0.00% in the short term, while long-term interest rates are likely to remain under pressure.

Mortgage rates and home financing

Interest rates for fixed-rate mortgages remain unchanged compared to the previous month. Currently, ten-year mortgages can be obtained at rates between 1.50% and 1.80%, depending on the provider. SARON-based mortgages continue to be the most cost-effective option, with rates of around 0.90% to 1.20%. Fixed-rate mortgages with terms of two to five years are currently available at between 1.15% and 1.40%.

The current interest rate environment is highly attractive, and the actual borrowing costs for mortgages are lower than they have been in years. However, affordability remains a hurdle: banks continue to apply significantly higher imputed interest rates and are under increasing regulatory pressure to strictly adhere to these requirements. For many prospective buyers, this means that, despite seemingly sufficient equity, the desired financing may not be approved. It is therefore highly recommended to clarify financing options early on, even for buyers who are confident in their borrowing capacity.

Why credit conditions for investment properties are likely to ease

In recent years, lending for investment properties and construction projects has been highly restrictive. Rising interest rates, the demise of Credit Suisse, and the introduction of Basel III at the beginning of 2025 have all contributed to a particularly cautious risk policy in these segments. Meanwhile, the mortgage market has stabilized, and several structural factors suggest that bank financing is likely to become more broadly accessible again next year.

Read our latest Mortgage Radar to find out what strategic considerations are decisive at the moment.

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Rafael Szucs, Head Key Clients & Corporates

Burak Er, Head Research & Advisory Solutions