Falling interest rates – now is the time to set sail for a property purchase

Admittedly, the cut in the key interest rate from 1.50 to 1.25 per cent did not come as a complete surprise; the move by the Swiss National Bank (SNB) had been anticipated by many market participants. However, the SNB is thereby injecting fresh momentum into home financing. Saron mortgages in particular, which are directly linked to the SNB’s key interest rate, are becoming more attractive as a result of the SNB’s rate cut and are approaching the price level of fixed-rate mortgages. The interest costs for a Saron mortgage are made up of the key interest rate plus an interest margin. As for fixed-rate mortgages – which remain attractive – with terms of up to ten years, experts expect a sideways trend, meaning fluctuations only within a certain range. This is because the expected interest rate cut has, to some extent, already been factored into the pricing of fixed-rate mortgages.

A good time to buy a home

When buying a property, the choice tends to be between a short-term mortgage or a Saron mortgage, or a fixed-rate mortgage, depending on the buyer’s risk appetite or need for security and their financial situation. “Overall, it is reasonable to assume that interest rates will stabilise at a moderate level,” says Thomas Graf, an experienced Bern-based estate agent. The risk of interest costs suddenly rising again has diminished. Consequently, planning certainty has increased. This creates a healthy interest rate environment which, regardless of the type of mortgage chosen, provides a sound basis for buying a home in both the medium and long term. “Now is a good time,” explains Thomas Graf. Home ownership remains in high demand. “Many people in Switzerland dream of owning their own home – and now, thanks to attractive interest rates, the conditions are right to turn that dream into reality,” emphasises the property expert. Another factor in favour of buying a home at this time is that the risk of a property bubble – a significant overvaluation of property and the danger of an imminent fall in prices – has fallen further in the first quarter of 2024, as shown by UBS’s Swiss Real Estate Bubble Index. Investing in a home can also be worthwhile, as banks are expected to cut savings interest rates or have already done so.
To ensure a successful property purchase, Thomas Graf recommends seeking expert advice: “Every home is unique and represents a significant asset. This requires proven expertise, professionalism and experience. After all, the property market is complex.”

Combined property and financial expertise

The experienced property team at thomasgraf ag provides personalised advice to prospective buyers on the various aspects of home ownership – whether it be a flat or a detached house. This established property service provider also offers an exciting selection of attractive properties for sale. thomasgraf ag is a certified member of the Swiss Chamber of Estate Agents (SMK) and also supports clients in the sale of a property – personally and to the highest quality standards. Thanks to thomasgraf ag’s close cooperation with the asset manager and family office service provider TRIONINVEST, as well as the financial services provider hypolino ag, it offers combined property-specific and financial expertise, many years of industry experience and a strong network.

Source

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