First decrease, then increase again in mortgage interest rates
In October mortgage rates on fixed-rate mortgages that were set up for ten years had fallen slightly. However, only by an average of 0.04 percent. They rose by the same value in November 2020 and are now at an average of 1.03 percent. In a historical comparison, however, the interest rate is still extremely low and far from heading towards a new high, as was already partially feared.
According to experts, the cheapest rate for mortgages taken out over ten years actually fell slightly in November, despite the higher average value. In September it was Zurich Insurance where the cheapest value was to be had. The mortgage interest there was only 0.84 percent. In October it was up to Homegate to offer the lowest interest rates, which were 0.79 percent. It is currently the BVK pension fund, located in the canton of Zurich, that offers an interest rate of 0.78 percent for ten-year mortgages. The BVK has not followed the general trend and has reduced its mortgage interest rates instead of increasing them as usual.
Consistent rates for shorter mortgages
Mortgages that are only taken out for a period of two to five years are still similar in terms of mortgage interest rates as before. The interest rates have changed little or even stayed the same. They are a little higher at Raiffeisen, but the Zürcher Kantonalbank has revised its interest rates downwards. Experts in the financial world agree that interest rates are unlikely to change dramatically so quickly, because it is assumed on the capital market that interest rates could remain so low for a long time.
The European Central Bank does not yet give any hope that the deposit rate could be increased. It is currently minus 0.5 percent. Until recently, a planned tightening of negative interest rates was under discussion, but this problem seems to be off the table. But it remains to be expected that the European Central Bank will loosen rather than tighten its interest rate policy. Incidentally, this also applies to the Swiss National Bank, which also has a negative interest rate and, with the current minus 0.75 percent, wants to ensure that the Swiss franc appreciate too much. In addition, strong interventions on the foreign exchange market are accepted or even forced.
The situation with long-term interest rates appears to be completely different. According to Credit Suisse, should the economy pick up, it can be expected that interest rates will rise significantly and that mortgage rates for ten-year mortgages will be particularly affected. It is therefore all the more worthwhile to compare the providers of mortgages and carefully examine their conditions. After all, the mortgage market is still seen as a buyer's market.
Bottom line: higher interest rates on ten-year mortgages
While mortgage rates have fallen over the past few months on loans that run for two or five years, they have risen on mortgages that are fixed for at least ten years. Experts even assume that mortgage interest rates will continue to rise in the near future, but this also only applies to long-term mortgages. Short- and medium-term mortgages could be spared and continue to come up with low interest rates or even negative interest rates.
