Interest rate forecast

Current interest rates can be considered “low” from a longterm perspective. How are UBS mortgages positioned in this environment?

The illustration shows an exemplary division of the financing into several mortgage tranches for a mortgage amount of 550,000 Swiss francs. Depending on the financing volume or customer situation, a different distribution or a single mortgage tranche could be appropriate.

10-year interest rates depend on how high inflation is and on the central bank’s key interest rates. If inflation and key interest rates remain at the low levels of recent years, long-term interest rates are likely to be in the range of 0 to 2 percent.

Interest rates have risen by almost 1 percent in the first few months of 2022. However, if investors’ inflation expectations remain stable, another sharp increase is unlikely.

The greatest influence on mortgage rates is interest rates on government bonds. They will remain low as long as inflation does not rise too sharply and the SNB does not massively raise its key interest rates. This is likely to remain the case in the next few years, which is why mortgage rates are likely to be low.

10-year interest rates have risen sharply in recent months after being in negative territory for years. The SNB’s key interest rates are still in negative territory and are only expected to become positive again in coming years.