SARON mortgage

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.