What is a SARON mortgage in Switzerland ?
May 8, 2026
What is a mixed mortgage in Switzerland ?
May 8, 2026What is a SARON mortgage in Switzerland ?
May 8, 2026What is a mixed mortgage in Switzerland ?
May 8, 2026
What is a variable-rate mortgage in Switzerland ?
What is a variable-rate mortgage in Switzerland?
A variable-rate mortgage is a form of property financing where the interest rate can change over time.
Unlike a fixed-rate mortgage, the rate is not locked in for a defined term.
It may increase or decrease depending on market conditions and the policy of the financial institution.
This type of mortgage therefore offers a certain degree of flexibility, but also less security regarding the amount of costs to be paid.
Also read on Immoprice: The different types of mortgages in Switzerland
How does a variable-rate mortgage work?
With a variable-rate mortgage, the interest rate is not fixed for several years.
It can be adjusted by the bank according to the general evolution of interest rates, market conditions, and its own financing policy.
This means that your mortgage costs can change over time.
If interest rates fall, your interest payments may decrease. If interest rates rise, your costs may also increase.
In Switzerland, buying a home generally relies on a share of equity capital and a share of mortgage financing.
Official source: ch.ch – Financing the purchase of a property
What is the difference with a fixed-rate mortgage?
The main difference concerns stability.
With a fixed-rate mortgage, the interest rate is set in advance for a defined term.
The costs are therefore predictable throughout the entire duration of the contract.
With a variable-rate mortgage, the interest rate can change.
You can benefit from a decrease in interest rates, but you are also exposed to an increase.
A variable-rate mortgage is therefore more flexible, but less secure.
It is better suited to homeowners who accept a certain degree of uncertainty or who want to keep a transitional solution.
Also read on Immoprice: What is a fixed-rate mortgage in Switzerland?
What is the difference with a SARON mortgage?
SARON mortgages and variable-rate mortgages have one thing in common: their interest rates can change.
However, they do not work in exactly the same way.
A SARON mortgage is linked to a specific reference rate in the Swiss money market: SARON.
A variable-rate mortgage, on the other hand, depends more on the conditions set by the bank.
The rate may be adjusted according to market developments, but also according to the policy of the financial institution.
Also read on Immoprice: What is a SARON mortgage in Switzerland?
The advantages of a variable-rate mortgage
The main advantage of a variable-rate mortgage is flexibility.
It can be attractive if you do not want to commit for a long period or if you are planning to sell your property soon.
In this case, avoiding a long fixed-rate mortgage can reduce the risk of penalties in the event of early termination.
It can also allow you to benefit from a decrease in interest rates, since the rate is not locked in as it is with a fixed-rate mortgage.
Finally, depending on the contract conditions, it can sometimes be converted more easily into another mortgage model, such as a fixed-rate mortgage.
The risks and limitations to be aware of
The main risk is rising interest rates.
If the variable rate increases, your mortgage costs will also increase.
This can make budget planning more difficult, especially if the household’s income does not allow it to absorb a significant increase in costs.
Before choosing a variable-rate mortgage, it is therefore important to check whether your budget can withstand an increase in interest payments.
FINMA closely monitors the Swiss mortgage market, as it represents an important issue for banks, households, and the real estate market.
Official source: FINMA – Credit risk: mortgages
Advantages and disadvantages of a variable-rate mortgage in Switzerland
| Advantages | Disadvantages |
|---|---|
| Generally offers more flexibility than a long fixed-rate mortgage. | The rate may increase at any time depending on market conditions and the bank’s policy. |
| Can be attractive if you plan to sell your property in the short or medium term. | Mortgage costs are less predictable than with a fixed-rate mortgage. |
| Allows you to benefit from a potential decrease in interest rates. | Rising interest rates can make the property budget more difficult to manage. |
| Can sometimes be converted more easily into another mortgage model. | Less secure for homeowners who want to know their costs over several years. |
| Can help avoid certain long-term commitments linked to a fixed-rate mortgage. | The exact conditions can vary significantly from one bank to another. |
Who is a variable-rate mortgage suitable for?
A variable-rate mortgage may be suitable for homeowners who want to maintain a certain degree of freedom.
It may be appropriate if you are thinking of selling your property in the short or medium term.
It may also be suitable if you do not want to commit to a long fixed-rate mortgage, or if you are considering changing mortgage models later.
However, if you want to know your costs precisely over several years, a fixed-rate mortgage will often be more reassuring.
The right choice depends on your financial situation, your risk tolerance, and your property project.
Variable-rate mortgage and property sale
If you are considering selling a property financed with a variable-rate mortgage, it is important to check the conditions set out in your contract.
In some cases, this type of mortgage may offer more flexibility than a long fixed-rate mortgage.
However, the exact terms depend on the bank: notice period, potential fees, repayment conditions, or the possibility of conversion.
Before selling, it is recommended to know the remaining mortgage balance, the termination conditions, any potential fees, and the current value of the property.
Also read on Immoprice: Selling a property with an existing mortgage
Why have your property valued before selling?
Before selling a house or apartment with an existing mortgage, it is essential to know the property’s current value.
A valuation helps you better anticipate the likely sale price, the mortgage balance to be repaid, the costs related to the sale, and the remaining margin after the transaction.
It also helps you decide whether it is better to sell now or wait.
With Immoprice, you can obtain a valuation of your property and compare several real estate agents in order to sell under better conditions.
In summary:
A variable-rate mortgage is a flexible financing solution whose interest rate can change over time.
It can be attractive for homeowners who want to avoid a long-term commitment or who are considering selling soon.
Its main advantage is flexibility. Its main risk is uncertainty: if interest rates rise, mortgage costs may also increase.
Before choosing a variable-rate mortgage or selling a property financed with this type of mortgage, it is recommended to check the contract conditions and have your property valued.
Are you considering selling your house or apartment? Immoprice helps you value your property and compare real estate agents suited to your project.
Calculate your financing capacity
Before committing, you can use our mortgage calculator to estimate your monthly payments and better understand the impact of property financing on your budget. Estimate your mortgage with the Immoprice mortgage calculator:
Do you already own a property?
If you are considering selling a property that is still mortgaged, it is useful to know its current value.
This helps you estimate whether the potential sale price covers the mortgage balance, any potential costs, and your future property project.
Estimate the value of your property with Immoprice: