SARON
Swiss Average Rate Overnight — the Swiss money market reference rate.
SARON (Swiss Average Rate Overnight) is the reference rate for the Swiss money market. It replaced LIBOR in 2021 and serves as the basis for calculating variable-rate mortgages in Switzerland.
SARON is calculated daily by SIX Swiss Exchange based on actual interbank transactions. Unlike LIBOR, which was based on estimates, SARON is an observed rate.
For SARON mortgages, the bank adds a margin (generally between 0.60% and 1.20%) to the SARON rate to determine the final interest rate.
SARON is directly influenced by the Swiss National Bank (SNB) policy rate. When the SNB lowers its policy rate, SARON generally follows.
Related terms
Fixed rate
A mortgage interest rate guaranteed for a set period.
LTV / Loan-to-value
Ratio between the loan amount and the property value.
Affordability
Ability to sustain mortgage costs according to bank criteria.
Need help with your mortgage project?
Simulate my project