What is a fixed-rate mortgage in Switzerland ?
May 8, 2026
What is a variable-rate mortgage in Switzerland ?
May 8, 2026What is a fixed-rate mortgage in Switzerland ?
May 8, 2026What is a variable-rate mortgage in Switzerland ?
May 8, 2026
What is a SARON mortgage in Switzerland ?
What is a SARON mortgage in Switzerland?
A SARON mortgage is a form of property financing whose interest rate evolves according to the Swiss money market.
Unlike a fixed-rate mortgage, its rate is not locked in for several years.
It can increase or decrease depending on interest rate developments.
This type of mortgage can be attractive for homeowners who want to benefit from potentially favourable market conditions.
In return, it requires a greater tolerance for risk, as costs can vary over time.
Also read on Immoprice: The different types of mortgages in Switzerland
What does SARON mean?
SARON stands for Swiss Average Rate Overnight.
It is a reference rate for the Swiss money market in Swiss francs.
More specifically, SARON reflects the cost of very short-term, overnight loans on the Swiss market.
It is administered by SIX, the official infrastructure of the Swiss financial centre.
The Swiss National Bank also states that SIX is the authority responsible for calculating and publishing SARON.
Official source: Swiss National Bank – interest rates and SARON
How does a SARON mortgage work?
A SARON mortgage is generally made up of two elements:
The SARON rate and a margin set by the bank.
The final rate paid by the borrower therefore corresponds to SARON + the bank margin.
For example, if SARON is at 1% and the bank’s margin is 0.8%, the applied rate will be around 1.8%.
Unlike a fixed-rate mortgage, this rate can change.
If SARON falls, interest costs may decrease. If SARON rises, costs may also increase.
What is the difference with a fixed-rate mortgage?
The main difference between a SARON mortgage and a fixed-rate mortgage lies in stability.
With a fixed-rate mortgage, the interest rate is set in advance for a defined term, for example 5, 10, or 15 years.
The costs are therefore predictable.
With a SARON mortgage, the rate follows developments in the money market more closely.
The costs can therefore vary.
A SARON mortgage is often more flexible, but less secure.
A fixed-rate mortgage is more stable, but may be less advantageous if interest rates fall after the contract is signed.
Also read on Immoprice: What is a fixed-rate mortgage in Switzerland?
The advantages of a SARON mortgage
A SARON mortgage has several advantages.
It can be attractive when interest rates are low or trending downward.
In this case, it may sometimes allow you to benefit from more favourable conditions than a fixed-rate mortgage concluded at a higher rate.
It also offers a certain degree of flexibility.
Depending on the conditions set out in the contract, it may be possible to switch to a fixed-rate mortgage if you wish to secure your financing.
Finally, it allows you to follow developments in the Swiss money market more directly.
The risks and limitations to be aware of
The main risk of a SARON mortgage is rising interest rates.
If SARON increases, your mortgage costs may also increase.
It is therefore important to have a sufficient safety margin in your budget.
Before choosing a SARON mortgage, you should ask yourself a simple question: can your budget withstand an increase in costs?
FINMA points out that the volume of mortgages in Switzerland is significant and that it monitors mortgage lending to ensure that it remains sustainable for banks and the real estate market.
Official source: FINMA – Swiss mortgage market
Advantages and disadvantages of a SARON mortgage
| Advantages | Disadvantages |
|---|---|
| The rate follows developments in the Swiss money market. | Costs may increase if SARON rises. |
| Can be advantageous when interest rates are low or trending downward. | Less secure than a fixed-rate mortgage. |
| Generally offers more flexibility than a long fixed-rate mortgage. | The budget is more difficult to plan over several years. |
| Depending on the contract, it may be possible to switch to a fixed-rate mortgage. | Requires good risk tolerance and a sufficient financial margin. |
| Allows you to benefit more quickly from a potential decrease in interest rates. | The exact conditions can vary significantly from one bank to another. |
Who is a SARON mortgage suitable for?
A SARON mortgage may be suitable for homeowners who accept a certain variation in their costs.
It may be appropriate if you want to benefit from a rate that follows the market while maintaining a certain degree of flexibility.
It may also be suitable if you have a good financial margin and accept that your monthly payments may vary.
However, if you want to know exactly what your costs will be over several years, a fixed-rate mortgage will often be more reassuring.
The choice therefore depends on your financial situation, your risk tolerance, and your property project.
SARON mortgage and property sale
If you are considering selling a property financed with a SARON mortgage, it is important to check the terms of your contract.
Depending on the bank, the conditions for exiting, repaying, or converting to a fixed-rate mortgage may vary.
Before putting the property up for sale, it is useful to know the remaining mortgage balance, the termination conditions, any potential fees, and the current value of the property.
A property valuation helps you better anticipate the sale and determine whether the likely price covers the mortgage balance and the costs related to the transaction.
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 real value.
A valuation helps you better assess 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 SARON mortgage is a flexible financing solution linked to developments in the Swiss money market.
It can allow you to benefit from attractive rates when conditions are favourable, but it also involves a risk of higher costs.
It is mainly suitable for homeowners who can handle interest rate fluctuations and who want to maintain a certain degree of flexibility.
Before choosing a SARON 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: