Swiss mortgages compared: variable rate, SARON and fixed rate

To finance a property purchase in Switzerland, borrowers can choose between three main types of mortgage: the fixed-rate mortgage, the SARON mortgage and the “classic” variable-rate mortgage. They differ in how the rate is set, how predictable your costs are and how flexible they are if you sell or change your plans. This article, updated in November 2026, compares the three and helps you pick the one that fits your situation.

The Swiss National Bank (SNB) cut its policy rate to 0% in June 2025 and kept it there at its assessment of 24 September 2026. SARON, which closely tracks the policy rate, is therefore hovering around 0%. Fixed rates do not depend directly on the SNB: they follow swap rates, i.e. market expectations over several years. That is why a 10-year fixed rate is currently noticeably higher than a SARON mortgage.

Rates change daily: see our current mortgage rates for up-to-date figures.

The interest rate is set at signing for a fixed term, usually 2 to 15 years (some lenders offer longer). Your interest costs are known in advance, whatever happens on the markets.

• Pros: full budget certainty, protection against rising rates, simple planning.
• Cons: a higher starting rate than SARON in today’s environment; if you sell or repay before maturity, the lender charges an early-repayment penalty that can be substantial.
• Who is it for? Households with little room in their budget, those who value peace of mind and those planning to keep the property for a long time.

Good to know: a forward mortgage lets you lock in today the rate for a renewal due in several months, for a small premium.

SARON (Swiss Average Rate Overnight) is the Swiss franc reference rate, calculated daily by SIX from actual money-market transactions. It replaced LIBOR, which was discontinued at the end of 2021. Your rate equals SARON compounded over the period (usually three months) plus the lender’s margin. Interest is charged in arrears.

• Pros: generally the lowest rate today; it immediately reflects any rate cut; many contracts let you switch to a fixed rate during the term.
• Cons: the exact interest amount is only known at the end of each period; any rise in the policy rate feeds straight into your costs.
• Term: SARON is often embedded in a 1- to 5-year framework agreement depending on the lender. Read the exit terms and the floor carefully (most banks do not go below 0%).
• Who is it for? Borrowers with a financial cushion to absorb a rise, or who need flexibility (planned sale, partial repayment).

Here the lender sets the rate and adjusts it at its discretion as the market moves. The contract has no fixed term and can usually be terminated at short notice (often 3 to 6 months). That flexibility comes at a price: the rate is generally well above a SARON mortgage. Fewer and fewer lenders offer it; it is mainly used as a temporary solution, for example ahead of a sale or a repayment.

You don’t have to put everything on a single option. Splitting the loan into several tranches (for example part SARON and part fixed, or fixed rates with staggered maturities) lets you benefit from low rates while limiting risk, and avoids having to renew your entire financing at the same time. Note, however, that tranches with the same lender make switching lenders harder until every tranche has matured.

Ask yourself three questions: how much of an increase in costs can my budget absorb? How long will I keep this property? Do I need to be able to repay or sell without a penalty? The answers point naturally to fixed, SARON or a combination of both.

The headline rate is only one factor: exit terms, the lender’s valuation of the property and flexibility matter just as much. We cover these criteria in How to choose your mortgage lender. For a renewal, see also our mortgage renewal service.

Torn between SARON and fixed? Contact our advisors: we compare offers from many partner lenders for you.