Are long terms worth it?
In addition to the interest rate forecast, when choosing the mortgage term you should also take into account that your own life situation can change.
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Has bottomed out: is there a trend reversal in interest rates coming soon?
Illustration: Christina Baeriswyl
I am considering switching to a pension fund mortgage. On average, the rates for a 5-year fixed-rate mortgage are around 0.5 percent and around 1 percent for 10 years. A term of 5 years has the advantage with the lower interest rate, and if you should sell the apartment, you are not bound for long. The last few years have shown that interest rates have only gone down and long terms have not been worthwhile. I tend to be 5 years. What do you recommend? Readers question from PS
In fact, interest rates in Switzerland have been pointing more or less downwards for years. In between there are short phases with an interest rate recovery. The basic trend was clearly downwards. In the meantime, however, long-term interest rates have risen slightly again in the USA, which has also caused interest rates to rise slightly in Europe. We are still at historic lows in terms of both capital market rates and mortgage rates, which you are referring to.
The big question now is whether the strong economic recovery in the US and rising inflation could soon induce the US Federal Reserve to reverse the trend in interest rates. At the moment it looks as if the higher inflation is only temporary and the central bank is sticking to the low interest rates. In Europe, too, there is currently little to suggest a turnaround in interest rates. The European Central Bank (ECB) has signaled several times that it would like to keep interest rates low for longer.
The high mountains of debt in Europe also speak against higher interest rates in the longer term.
This also sets the framework for interest rates here in Switzerland. Since the Swiss National Bank is heavily dependent on the European Central Bank because of the strong franc, it will certainly not be able to raise interest rates in this country before the ECB does too. Interest rates can therefore be expected to remain low in the short and medium term.