Because getting out of the money market mortgage can be costly
Not only with fixed rate mortgages, but also with Saron mortgages, most customers are bonded and have to pay an early repayment penalty if they terminate early.
Flexibility, non-existent! Most Saron mortgage holders also sign a master agreement with a deadline.
Illustration: Christina Baeriswyl
We currently have a Saron money market mortgage on our apartment building, with a contract term until September 2024. Since the benchmark interest rates are now positive again after the increase by the SNB, this money market mortgage will increase correspondingly more expensive by the SNB immediately and if further increases in the reference interest rate can be foreseen. Since we have sufficient liquid funds, we could immediately pay off this mortgage without any problems. We would like to know what costs we incur in the event of early termination of a money market mortgage. Reader question from PW
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