SARON mortgage

The interest calculation for a SARON mortgage is based on SARON (Swiss Average Rate Overnight). SARON is an interest rate used when financial institutions borrow money overnight. It is calculated daily by SIX Swiss Exchange. This means that the SARON mortgage follows the changes in the money market. Unlike a fixed-rate mortgage, the interest rates for a SARON mortgage are therefore variable.

However, so that you don't have to pay interest every day, interest is charged at regular intervals, usually at the end of each quarter. To calculate the exact amount of interest due, we look at how the SARON has developed over the past three months. SIX offers the Compounded SARON reference interest rate, which can never be less than zero. You contractually agree a margin with us that is added to the Compounded SARON. This results in your total interest costs.

The SARON mortgage follows the changes in the money market. This is great when interest rates fall, but you have to pay more when interest rates rise. You can protect yourself against rising interest rates by converting all or part of your SARON mortgage into a fixed-rate mortgage in just a few working days. With a fixed-rate mortgage, you fix the interest rate for the entire duration of the contract.

You can also combine a SARON mortgage with a fixed-rate mortgage. This means that only a portion of your interest costs fluctuate, while the rest always stays the same.

With a fixed-rate mortgage, you are protected against rising interest rates. But you don't benefit if interest rates fall either. The situation is different for a mortgage with a variable interest rate (SARON mortgage). With a SARON mortgage, you benefit when interest rates fall, but you also pay more when interest rates rise. It is therefore advisable to combine fixed-rate mortgages and SARON mortgages by dividing your mortgage into tranches.

Which mortgage combination is best for you depends on several factors. This includes your risk tolerance, what financial reserves you have, and what your long-term plans are, i.e., whether you want to sell the property, for example. It is best to talk to our mortgage experts so that we can look at your situation together.

One advantage of the SARON mortgage is that it can be converted into a fixed-rate mortgage at any time. This allows you to fix an interest rate, for example if you are worried interest rates will rise.

When interest rates on long-term, fixed-rate mortgages rise, it is often a sign that the market interest rate will also rise. That's why you should not only pay attention to how short-term interest rates develop but also keep an eye on long-term market interest rates. We recommend that you regularly review your strategy with your client advisor.

The LIBOR (London Interbank Offered Rate) reference rate was replaced by SARON at the end of 2021.

SARON (Swiss Average Rate Overnight) has existed since 2009 and is calculated on the basis of completed transactions and binding quotes (buy and sell prices) in the Swiss money market. It is calculated daily by SIX Swiss Exchange. The SARON is publicly visible, transparent and meets the requirements of international benchmark standards.

Of course – and even free of charge. We’ll help you put together your mortgage right from the start. However, the choice of offer and provider is entirely up to you.

Arrange a non-binding consultation. Together, we can find the right mortgage to match your current situation in life and you will receive a non-binding interest rate offer.

Answer a few questions online about the mortgage you want, your property and your financial situation.

With just one inquiry, you get the most attractive offers from our providers within seconds. Transparent and easy to compare. Interested in an offer? We’ll send you the offer by email and you can arrange an advisory consultation, if you wish. From here, our experienced advisors take over and explain step by step what happens next.