Libor mortgage

The predecessor to today's UBS SARON mortgage

The LIBOR (London Interbank Offered Rate), which was one of the most important indicators on the financial markets, will be discontinued by the end of 2021. The LIBOR mortgage will therefore be replaced by the SARON mortgage.

With the new SARON mortgage, you benefit from a flexible money market mortgage with a Swiss base interest rate. With the introduction of the SARON mortgage, UBS will stop offering LIBOR mortgages. The exact procedure for converting an existing LIBOR mortgage will be announced in due course.

SARON mortgage
What are the reasons for the replacement of Libor?

Banks have been lending each other money to an increased extent only against the deposit of collateral since the financial crisis of 2008/09. As a result, for many maturities no genuinely unsecured transactions can be concluded at all anymore, and prices for such transactions can only be estimated. Due to this procedure, Libor has become less significant and is no longer suitable in the long term as the reference interest rate in the money market.

The money market interest rate SARON (Swiss Average Rate Overnight) was recommended as the new reference rate in Switzerland.

Facts about a future without Libor pdf, 81 KB
How are you planning to convert current UBS LIBOR mortgages?

The procedure for the conversion of current UBS LIBOR mortgages will be announced in due course.

As a general rule, once the new SARON mortgage has launched, clients will have an opportunity to convert all or part of their LIBOR mortgage into a SARON mortgage at the end of the fixed-interest period (that is, within 3, 6 or 12 months).

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