Fixed rate
A mortgage interest rate guaranteed for a set period.
A fixed-rate mortgage offers a guaranteed interest rate for the entire contract duration. In Switzerland, common durations are 2, 3, 5, 7, 10 and sometimes 15 years.
The main advantage is security: your mortgage charges remain identical throughout the term, regardless of market fluctuations.
Fixed rates are determined by long-term interest rates on financial markets (Confederation bonds, swap rates). The longer the duration, the higher the rate generally is.
At renewal, the new fixed rate will be whatever the market rate is at that time. It is recommended to start comparing offers 12 to 18 months before maturity.
Related terms
SARON
Swiss Average Rate Overnight — the Swiss money market reference rate.
Affordability
Ability to sustain mortgage costs according to bank criteria.
Amortisation
Gradual repayment of the mortgage principal.
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