All you need to know about Banque Nationale mortgages


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In Switzerland, locals and foreign nationals alike can take advantage of several mortgage models. The Swiss Banque Nationale plays a key role in designing the offers available to you. It is not possible to borrow directly from this organization. Nevertheless, its work influences the rates at which you can borrow to finance your project.

What is the role of the SNB?

The main objective of the Swiss Banque Nationale is to conduct Swiss monetary policy. It must ensure the general interest of the country, trying to protect its inhabitants against price increases, despite the international context.
The SNB also has a hand in the supply of cash. In other words, it chooses the quantity of banknotes issued each year.
To ensure the stability of the Swiss financial system, it administers the country's assets, handles international monetary cooperation and manages the banking services made available to the confederates. It publishes official statistics on banks, financial markets and investments in Switzerland.

Swiss mortgage models

When it comes to mortgages, the Swiss Banque Nationale plays a role, concerning the rates at which they are granted to you. While it doesn't decide exactly what rates you'll be offered, its work in compiling rates on international financial markets is very useful. It also sets the borrowing conditions. In particular, you owe it the 33% debt ratio that must not be exceeded. The amount of money produced also influences rates.

Fixed-rate mortgage

The fixed-rate mortgage is an ideal banking product for risk-averse profiles. As its name suggests, it allows you to benefit from a fixed rate for the entire duration of the loan. So you won't have any unpleasant surprises linked to rate fluctuations. You can also concretely anticipate the costs associated with your investment.

The variable-rate mortgage

With the variable-rate loan, the rate of your loan is revised regularly, according to the various fluctuations in rates offered by banks. If rates rise, so does the rate of your loan. On the other hand, when rates fall, you win and save.

The SARON mortgage

The SARON mortgage is also a mortgage with a variable rate. The latter is nevertheless indexed to the financial indicator to which it owes its name. SARON is a financial indicator created by the SNB to guarantee complete objectivity for customers. It has replaced the famous LIBOR.

Other commercial offers

Depending on the banking organization you choose to turn to, you may also find other forms of mortgage. These are in fact variations on the three models we presented earlier.
They can be a fixed-rate mortgage, to which the lending organization comes to associate a death insurance. Alternatively, you may be offered a variable-rate mortgage, convertible to a fixed-rate mortgage.
Finally, you may be offered reductions on the interest on your loan, as part of the purchase of certain properties. In general, homes with a lower environmental impact are targeted.

Mortgage rates and conditions

To be able to lend you money, your bank itself borrows money on the financial markets. Your mortgage rate therefore includes the rate at which your bank has borrowed the money it is lending you. It also adds a margin, which enables it to earn a return on the money it lends.
In Switzerland, therefore, it's not the Swiss Banque Nationale directly that dictates rates. Its observations and actions can enable you to anticipate the trend for the coming months.
Valery Chantepy
Updated on: 31.01.2024Written by Valery ChantepyHead of mortgage department at Comparea
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