Compare mortgages and mortgage rates


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Mortgage comparison is a key step in your real estate investment project. In particular, it enables you to get the best rate. However, it's not the only factor you need to consider before putting your trust in a bank. The bank's ethics and the options it offers can also help you make the right choice. In this article, we offer you a wealth of information on comparing the different mortgages available on the market.

4 steps to comparing mortgage loans and rates

Choosing the right mortgage model

First of all, you need to know that there are several types of mortgage. You may prefer the fixed-rate mortgage. The interest rates to be paid are fixed when the commitment is signed and will remain the same until the end of the commitment. This alternative is recommended if you wish to anticipate precisely the charges associated with your loan. Fixed-rate mortgages offer budget predictability and protection against rising interest rates, making them an attractive credit option. In Switzerland, they are often chosen when financing a property. However, it is important to note that a fixed-rate mortgage is not always the best solution in every situation. When life changes, such as a new career direction, family changes or relocation, the long duration of a fixed-rate mortgage can become a disadvantage. So it's essential to carefully assess your needs and situation before making a decision.
A variable-rate mortgage is another alternative. It allows you to adjust your rate regularly, in line with current market interest rates. This alternative is ideal, when rates tend to fall.
Finally, the SARON mortgage is the last great alternative available on the market. It involves a variable interest rate, based on the SARON financial indicator.

Comparing interest rates

Once you've chosen the mortgage model that matches your profile, you'll need to compare interest rates. To do this, you can consult those posted on bank and lender websites. Mortgage loan calculators are also formidable tools, to help you in your search. Most banks now offer this kind of online solution. Comparea also provides you with a dedicated calculator.
The most sensible thing is still to ask for offers, to be sure of the personalized rate you're offered based on your project. As a reminder, your income, your equity, the value of the property and the way you carry out your financing package influence the latter.

Compare options

Don't hesitate to take a look at the options under which the bank lends you money, too. Some banks, for example, offer flexible conditions, regarding the variable-rate loan.
There are options to protect your assets and your loved ones. In particular, BCN's Hyposafe formula allows you to benefit from death insurance to guarantee the 2nd rank of the loan.

Study special offers

Depending on the bank you choose to trust, you can also take advantage of special offers. Most of the time, these are offered to new customers, to motivate them to transfer their assets to the new banking organization.
There are other offers, such as those that promote the purchase of goods with a moderate environmental impact. This is the case with Migros, which offers an Eco discount. If your home meets certain energy-efficiency criteria, you can take advantage of a reduction of 0.15% on your rate.

Mortgage rate comparison

The values given in the tables are indicative average rates provided by lending organizations as at December 21, 2022. Rates may be adapted to your profile or negotiated. The display of the latter therefore does not represent a commitment on the part of the bank.

Variable mortgage rates

Contrary to popular belief, not all banks apply the same rates, if you choose variable-rate Swiss mortgages. Your mortgage rate is effectively that at which new loans are offered.You will nevertheless pay a mark-up on this rate. This is the part you can negotiate when you take out your loan.

Rates for the SARON mortgage

For the SARON mortgage, it's fairly easy to find the mark-ups offered by the various banking organizations. They are, once again, indicative. The rates given below are in addition to the SARON rate.

Factors driving up rates

It's important to point out that for certain investments, the interest rates offered to you are almost systematically higher. This is the case if your purchase is exclusively for real estate investment. In general, the rates offered are higher than those observed for the purchase of a principal residence.
Mortgages for vacation homes are also subject to higher rates than those for principal residences. As this is a secondary property, it can also be more difficult to obtain a mortgage in Switzerland. The conditions for obtaining credit will be much stricter, particularly from the point of view of income and equity contributions.

Can the mortgage be negotiated?

It is of course possible to negotiate the mortgage. You can choose to negotiate the interest rate at which the bank lends you money. To set the interest rates it offers you, it uses the interest rate at which it borrows money itself on the financial markets. To this, is added its commercial margin. It's on this second part of the rate's composition, that you have a negotiating margin.
Negotiating skills remain essential to be able to engage in this type of debate. Perseverance is a must. Certain elements of your file can really support your request. For example, the fact of having significant equity capital may decide the bank to make a gesture.

Can the mortgage finance the entire project?

Also remember that even with a sufficient personal contribution, your application is still subject to the bank's review. Exceeding the maximum debt ratio allowed, for example, is an absolute brake, for obtaining mortgages in Switzerland. You'll also need to be able to afford the various ancillary costs associated with amortization of the property and its upkeep.

Which creditor should you choose for your mortgage?

Banker or insurer for a mortgage?

It's important to point out that for many years now, the boundary between banks and insurers has become increasingly blurred. Insurers offer banking products and bankers insurance products. That's why it's now referred to as the "bank-insurance sector".
While there used to be differences in skills between these players, the increasing training of agents means you can benefit from sound advice, whatever your choice. So you can let yourself be guided by comparing mortgage interest rates or even the mortgage models on offer. Insurers like Generali manage to offer attractive rates in this way.

The online mortgage solution

The online banking solution also offers great opportunities when it comes to mortgages. Indeed, lenders who manage to reduce their operating costs can directly apply it to the interest rates offered to you. In the previous comparison table, you no doubt noticed the competitiveness of players such as AXA or Migros. The latter have largely chosen to dematerialize part of their offer.
From an individual's point of view, an online offer can also save time. In particular, you can save on branch appointments and facilitate the transmission of documents. Most of the time, processing times are reduced by the use of new technologies.

How to make your mortgage project a reality?

Constituting your file

On most mortgage loan calculators, you'll need to fill in:
  • The total amount of the property acquisition project
  • Your annual income
  • The equity you wish to contribute
To put together your file, you'll need to gather all the elements you need to prove the statements you've made. You may be asked for proof of identity, income or available savings. An official document attesting to the value of the mortgaged property is also essential.
This will enable the lending organization to check that your debt ratio is well below the required 33%. It will also be able to test your solvency and judge the risks taken based on your profile.

Requesting offers

Once you've provided all the documents required to study your mortgage application, you may eventually receive offers. This time, it's no longer a simple estimate, but truly what the bank is prepared to commit to offering you.
You will then embark on the task of comparing the mortgages mentioned above, from the point of view of interest rates, but also options and guarantees.

Administrative formalities

Next comes the moment of signing the sale of the property and your loan offer. These take place at your notary's office and with your bank, respectively.

Use an advisor to compare loans and interest rates

The process of finding the best possible mortgage in Switzerland is time-consuming and complex. Calling in a financial professional can therefore be indispensable, to put the various banks in competition and obtain various information on the feasibility of your project.

Obtaining financing

Even before comparing loan offers, you still need to succeed in convincing banking organizations about your financing. If your personal funds are limited, calling in a professional can help you sell your financing case more effectively. In particular, he or she can explain certain financial packages to you, so you can claim the financing you need.

Getting the best deal

The financial advisor can put you in touch with members of his or her network. In general, partnerships with banking organizations allow you to benefit from greater negotiating leeway, than when you present your file alone. This gain in time and information can prove crucial in setting up your project, based on neutral, impartial advice.
It also offers you an expert eye, to compare the loan offers proposed to you. So you can be sure you're not making a mistake, relying solely on rates. In particular, he can analyze the penalties that will be applied to you in the event of early repayment, or other factors that may influence your reasoning.

Tax optimization

In Switzerland, using the 3rd pillar of pension provision, you can carry out tax optimization operations using a mortgage loan. To find out how advantageous this solution can be according to your profile, your financial advisor is a key contact.
He can also help you throughout the entire term of your mortgage. His role, for example, is to guide you, should you wish to make an early repayment, despite the penalties applied. In the event of renewal of your mortgage, he will help you find the best possible alternatives.

Save time

As you can see, this professional not only helps you optimize your file, but also saves you time. All the steps taken on your behalf, to compare mortgages and mortgage rates, save you time. Between the sums saved over the duration of the mortgage, the less stress and the time saved, the arguments are numerous.
Whatever your project, we'll be happy to analyze your file and help you. Don't hesitate to contact us!
Valery Chantepy
Updated on: 31.01.2024Written by Valery ChantepyHead of mortgage department at Comparea
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