The mortgage rates in Switzerland have significantly decreased in the second quarter of 2025, approaching the annual low of late 2024. This positive development has substantial impacts on private investors and savers, as lower mortgage rates lead to more favorable credit terms, thereby improving financing conditions for property purchases.
Current Interest Rate Development
Interest Rate Reduction by the Swiss National Bank: The Swiss National Bank has once again lowered the key interest rate. In May 2025, the key interest rate was reduced by 25 basis points to 0.25%, positively impacting the mortgage market.
Mortgage Rates: Long-term mortgage rates remain at about 4%, while ten-year fixed mortgages have fallen below the 2% mark.
Effects on the Real Estate Market
Appeal of Home Ownership: Falling interest rates increase the appeal of home ownership, leading to rising demand and accelerating price dynamics in the real estate market.
Housing Dream Study 2025: The study forecasts strong growth in the Swiss mortgage market over the next five years, with a volume of CHF 50 to 150 billion.
Construction Activity and Demand: Despite high demand, construction activity is declining, resulting in a tight supply of housing. Replacement construction is necessary to close the building gap.
Economic and Social Aspects
Economic Conditions: The declining interest rates and increased immigration have positive effects on building permits and could stimulate construction activity.
Social Impacts: The growing replacement of old apartments with new buildings may lead to a loss of affordable housing, posing social challenges.
Overall, lower mortgage rates provide private investors and savers with more favorable conditions for purchasing real estate. At the same time, challenges in housing construction and the rising demand for housing represent important factors influencing the real estate market in Switzerland.