The SARON mortgage in Switzerland: complete guide 2026

The SARON mortgage has become the reference variable-rate product in Switzerland since LIBOR was replaced in 2021. With an SNB rate of 0.0% in March 2026, it currently offers the most attractive conditions on the market. But how does it actually work? What are the risks? This guide answers all your questions.

From LIBOR to SARON: a brief history

For decades, variable-rate mortgages in Switzerland were based on the LIBOR (London Interbank Offered Rate). But after the LIBOR manipulation scandal discovered in 2012, international regulators decided to replace it with more reliable rates based on actual transactions rather than bank declarations.

In Switzerland, SARON was chosen as the successor. The transition took place progressively between 2019 and 2021, with the definitive discontinuation of LIBOR CHF on 31 December 2021. Since 1 January 2022, all new variable-rate mortgages are based on SARON.

How does SARON work?

The pure SARON rate

SARON is calculated and published daily by SIX Swiss Exchange (the Swiss stock exchange). It measures the average interest rate of guaranteed overnight lending transactions between Swiss banks. Unlike LIBOR, it is based on actual transactions, making it more reliable and resistant to manipulation.

The pure SARON is strongly influenced by the SNB policy rate. When the SNB changes its rate, SARON follows almost immediately. In March 2026, with a policy rate of 0.0%, the pure SARON fluctuates around 0.0% to 0.04%.

Compounded SARON

For mortgages, the compounded SARON is used, which is a geometric average of daily SARON rates over a given period, typically 3 months. This calculation smooths daily fluctuations and gives a more stable rate.

The rate is recalculated at the end of each quarter. You therefore know your exact rate for the next 3 months, which provides some short-term predictability.

The bank margin

The margin is the bank's compensation. It is fixed for the entire contract duration and is added to the compounded SARON:

The typical margin is between 0.60% and 0.90%, but it is negotiable. Factors that influence it:

• Your risk profile: the lower your loan-to-value ratio (LTV) and the more stable your income, the lower the margin.
• Mortgage amount: larger volumes often obtain lower margins.
• Banking relationship: existing clients with significant assets benefit from preferential conditions.
• Competition: by comparing offers, you put banks in competition on the margin.

Current SARON rates: March 2026

The gap between the lowest offers (0.64%) and the highest (1.20%) is considerable: on a CHF 800,000 mortgage, that represents CHF 4,480 per year. This is why comparison is essential.

Historical evolution of SARON and the policy rate

Understanding rate history helps anticipate future movements:

• 2015-2022: SNB policy rate at -0.75%, negative SARON, SARON/LIBOR mortgages often below 1%.
• June-September 2022: the SNB raises its rate from -0.75% to +0.50% to combat inflation. SARON mortgages double rapidly.
• June 2023: policy rate at 1.75%, the peak of the cycle. SARON mortgages reach 2.50% to 2.80%.
• March 2024-2025: the SNB begins a series of rate cuts as inflation recedes.
• March 2026: policy rate at 0.0%, SARON at its floor, SARON mortgages at 0.64-1.20%.

This evolution shows that SARON can vary significantly in a short time. In 18 months (2022-2023), the rate tripled. In 3 years (2023-2026), it fell back to its starting level.

Advantages of the SARON mortgage

1. The lowest rate on the market

Historically, the SARON mortgage (and before it LIBOR) has on average been cheaper than the fixed rate. Studies show that over the last 20 years, SARON/LIBOR borrowers paid less than fixed-rate borrowers in approximately 75% of cases.

2. Maximum flexibility

Unlike a fixed rate, SARON can be terminated with a simple 3 to 6-month notice period. No early termination penalty. You can switch to a fixed rate at any time if you wish.

3. Transparency

SARON is a public market rate, calculated daily by SIX. You know exactly how your rate is determined. Only the margin needs to be negotiated.

4. Benefit when rates fall

If the SNB lowers its policy rate (or keeps it low), you benefit immediately at the next quarterly adjustment. With a fixed rate, you are locked in for the entire term.

Risks of the SARON mortgage

1. Sensitivity to SNB decisions

If the SNB raises its policy rate, your SARON mortgage increases almost instantly. The 2022-2023 episode clearly demonstrated this: within a few months, SARON rates rose from under 1% to nearly 2.80%.

2. Budget uncertainty

Your mortgage payments can vary from one quarter to the next. If your budget is tight, this uncertainty can be stressful. It is recommended to maintain a financial reserve equivalent to the difference between your current rate and a scenario with a 2% to 3% increase.

3. Psychological risk

Some borrowers panic when rates rise and rush to switch to a fixed rate at the worst possible moment (when fixed rates are also at their peak). This emotional reaction can be costly.

Who is the SARON mortgage suited for?

SARON is particularly suited to the following profiles:

• Good financial capacity: you can absorb a 2-3% rate increase without difficulty.
• Liquidity reserve: you have sufficient savings to cope with a temporary rate rise.
• Flexible horizon: you do not rule out selling or refinancing in the coming years.
• Risk tolerance: you accept variability in exchange for a lower average rate.
• Large mortgage amount: the larger the mortgage, the more significant the rate saving in absolute terms.

Conversely, if your budget is tight, if you need absolute predictability, or if you cannot tolerate financial uncertainty, a fixed rate will be more suitable.

SARON vs fixed rate: the dilemma

This is the question every borrower asks. The answer depends on your profile, your expectations and your risk tolerance. We have dedicated a complete guide to this comparison: SARON vs fixed rate, how to choose?

In summary, in March 2026, with SARON at 0.64-1.20% and a 5-year fixed rate at 1.09-1.65%, the gap favours SARON. But the question is: how long will this favourable environment last?

Practical tips for optimising your SARON mortgage

1. Negotiate the margin: this is the only element you can control. Compare offers from multiple banks.
2. Set a conversion threshold: at what rate will you switch to fixed? Decide this calmly, not in a panic.
3. Build a reserve: set aside each month the difference between your SARON payment and what you would pay on a fixed rate.
4. Follow SNB announcements: the SNB meetings (4 times per year) are the key moments to anticipate rate movements.
5. Get professional support: a broker monitors the market for you and can alert you at the right time.