| Ramzi Chamat
Switzerland, with its robust economy and stable financial system, has always been a barometer for global financial markets. In this context, the interest rates of fixed mortgages provide a valuable insight into the country's economic health and upcoming monetary trends.
Switzerland, a mountainous country in Central Europe, is renowned for its economic and financial stability. Recently, the landscape of interest rates for fixed mortgages has undergone significant changes. This article delves into these shifts and their implications for borrowers and investors.
At the beginning of the year, the Swiss economy showcased attractive growth. However, this growth might slow down in 2023, even though there's no looming threat of a recession. The Swiss Gross Domestic Product (GDP) is projected to increase by 0.9% this year.
Inflation is a key indicator for any economy. In Switzerland, it fell below 2% for the first time since January 2022, standing at 1.7% in June. However, with the rise in prices, especially rents, it's expected to exceed 2% in the coming months.
The Swiss National Bank plays a pivotal role in determining interest rates. Responding to inflation trends, it plans to raise its key rates by 25 basis points to 2% in September. This decision might influence the interest rates of mortgages.
Fixed mortgages are home loans with a fixed interest rate. Here are the current rates and their forecasts for the next 12 months:
Perspectives: The interest rates of fixed mortgages have recently increased due to high inflation and key rate hikes. However, they are expected to decrease by 35 to 60 basis points over the next 12 months.
For a good balance between flexibility and security, it's recommended to combine different mortgages and durations. Three strategies are proposed based on the client's risk profile: Security-focused, Balanced, and Dynamic.
The interest rates of fixed mortgages in Switzerland reflect the country's economic health. By understanding these rates and their fluctuations, borrowers, investors, and policymakers can make informed decisions for the future.
Source : Credit Suisse
Key words : Switzerland, interest rates, fixed mortgages, Swiss National Bank, inflation, Swiss economy, Credit Suisse, recommendations, monetary trends, housing market, financial stability, borrowers and investors.
