Interest rate forecast

UBS mortgages in the current interest rate environment
20 June 2022

Surprise move by the National Bank

On 16 June, the Swiss National Bank (SNB) raised key interest rates by 0.5 percentage points to -0.25 percent. The SNB was expected to raise key interest rates, but only following the prior, anticipated rate hike by the European Central Bank in July. The reason given by the Swiss National Bank for this early rate hike was its desire to counter higher inflationary pressures in Switzerland. The SNB’s rate hike is unlikely to be its last. We expect the SNB to raise key interest rates to 0.75 percent by the middle of next year.

However, in the medium term, we do not expect any additional increase in longer-term (e.g., 10-year) interest rates. Longer-term interest rates have already risen sharply in recent months and are likely to have anticipated this increase in key interest rates. For this reason, we expect interest rates on bonds and mortgages to trend sideways in the coming quarters. But in these uncertain times – for central banks and investors – high volatility on the capital markets must be expected in the short term.

Long-term interest rate trend in %

Section for a description of the chart and what it presents

Interest rate forecast in figures

Rates

Rates

20.06.22

20.06.22

30.06.22

30.06.22

31.12.22

31.12.22

30.06.23

30.06.23

31.12.23

31.12.23

Rates

SARON

20.06.22

–0.21

30.06.22

–0.57

31.12.22

0.58

30.06.23

0.75

31.12.23

0.75

Rates

Swap 3 years

20.06.22

1.40

30.06.22

1.18

31.12.22

1.15

30.06.23

1.06

31.12.23

0.98

Rates

Swap 5 years

20.06.22

1.65

30.06.22

1.56

31.12.22

1.39

30.06.23

1.18

31.12.23

1.09

Rates

Swap 10 years

20.06.22

2.04

30.06.22

1.95

31.12.22

1.72

30.06.23

1.29

31.12.23

1.27

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