In Switzerland, the mortgage rate on a new loan starts from a market rate for the chosen term, to which the bank adds its funding cost and its margin, according to the Swiss National Bank (SNB). As of 30 October 2026, PostFinance was quoting a rate from 1.84% for a 10-year fixed-rate mortgage. The SNB policy rate remained at 0%, and the reference rate for rents at 1.25%.

This page in our real estate and mortgages section describes what makes up this price and what moves it. It draws on the pages of the SNB, the Federal Office for Housing (FOH), SIX and PostFinance.

How is a mortgage rate set in Switzerland?

A mortgage rate is built in layers, and the first is the swap rate. This is the fixed rate that players in the derivatives markets exchange for a variable money market rate, such as SARON. The SNB uses it to measure expected rates and the term premium.

The second layer is the bank's funding cost. According to a speech given on 13 November 2025 by Petra Tschudin, member of the SNB Governing Board, and Thomas Moser, alternate member, it breaks down into four components:

  • the short-term rates expected over the term of the funding;
  • a term premium, which compensates for uncertainty about future rates and inflation;
  • a credit premium, for the risk of the bank defaulting;
  • a liquidity premium, linked to the tradability of the security and to investors' constraints.

The third layer is the interest margin, i.e. the spread between the loan rate and the funding rate. The SNB describes it as an important source of income for banks.

Finally, the rate depends on the borrower. PostFinance, the bank of Swiss Post, cites the borrower's income, financial capacity and collateral, alongside external factors such as the economic situation and the policy rate. Its published rates are indicative: they assume maximum creditworthiness and an owner-occupied home.

What role does the SNB policy rate play?

The policy rate is passed on first to money market rates, starting with SARON. According to the SNB's current interest rates page, it has stood at 0% since 20 June 2025. SARON stood at -0.05% at the close on 29 October 2026.

The SNB has confirmed this level several times. On 11 December 2025, it left its policy rate at 0%, according to its Quarterly Bulletin 4/2025. On 24 September 2026, it held it again. Its Quarterly Bulletin 3/2026 states that medium-term inflationary pressure had increased only slightly compared with June.

This floor ends a series of cuts. According to the speech of 13 November 2025, the SNB has lowered its policy rate by 1.75 percentage points since the start of 2024. Market and lending rates fell accordingly.

For a fixed-rate mortgage, the link is more indirect. The benchmark is the swap rate for the chosen term, which builds in expectations over several years. The yield on 10-year Confederation bonds provides a reference point: 0.505% on 30 October 2026, according to the SNB. Bulletin 3/2026 notes that the yield curve for these bonds has shifted upwards since mid-June 2026.

Swiss mortgages: fixed or SARON, which rate tracks what?

SARON, short for Swiss Average Rate Overnight, measures the cost of an overnight loan in francs, secured by securities. SIX, the operator of the Swiss stock exchange, calculates it as the index administrator. It is a volume-weighted average of transactions and binding quotes on the Swiss repo market.

SIX also calculates compounded SARON rates, from one week to 12 months. They are determined in arrears: the rate for a period is known only once that period has elapsed.

A SARON mortgage is based on this mechanism. At PostFinance, as of 30 October 2026, it runs for 3 years and costs the 3-month compounded SARON plus a margin from 1.00%. Its rate therefore tracks the money market, whereas a fixed-rate mortgage keeps the same rate for its entire term.

PostFinance productIndicative rate as of 30 October 2026
2-year fixed-rate mortgagefrom 1.40%
5-year fixed-rate mortgagefrom 1.69%
10-year fixed-rate mortgagefrom 1.84%
15-year fixed-rate mortgagefrom 1.90%
3-year SARON mortgage3-month compounded SARON, plus a margin from 1.00%

The longer the term, the higher the quoted rate. These figures are from a single bank, are non-binding, and vary by institution and by application.

Why have mortgage rates fallen less than the policy rate?

Lending rates have fallen, but less than the general level of interest rates. On 13 November 2025, the SNB attributed this to the rise in banks' funding costs. It measures them by the spread between their funding rate and the swap rate.

The SNB gives a numerical example with Pfandbriefe (mortgage bonds), bonds issued to fund mortgages. On the secondary market, the spread on 10-year mortgage bonds exceeded 40 basis points in November 2024. Its ten-year average was around 20 basis points. At the time of the speech, it stood at around 30 basis points.

The SNB puts forward three main explanations:

  • the rise in yields on foreign government bonds relative to swap rates;
  • the change in the structure of the banking market after the takeover of Credit Suisse by UBS in 2023, which shifted lending towards domestically focused banks;
  • more demanding liquidity management, with higher minimum reserves and stricter requirements for systemically important banks.

Banks have passed on part of this cost. According to the SNB, the average spread between published mortgage rates and swap rates has risen by around 20 basis points since 2024. Looking ahead, it judged in November 2025 that a rapid decline in funding costs was unlikely.

Lending has not slowed as a result. Mortgage loans then accounted for more than 85% of total lending volume and were growing by around 3%, according to the same speech. In its Bulletin 3/2026, the SNB notes that credit growth has barely changed and that residential property prices have continued to rise.

What is the reference rate, and what does it change?

The reference rate does not set the price of a mortgage: it is used to adjust rents. The FOH has published it since September 2008. It is based on the weighted average interest rate on mortgage claims in Switzerland, rounded to the nearest quarter of a percent.

This average rate covers all mortgage claims, not just new loans. As of 30 June 2026, it stood at 1.31%, whereas PostFinance's fixed rates for new business ranged from 1.40% to 1.90% as of 30 October 2026.

According to the FOH press release of 1 September 2026, the reference rate remains at 1.25%, its level since 2 September 2025. The reference rate will only move if this average rate falls below 1.13% or rises above 1.37%.

For a tenant, what counts is the rate stated in their lease. If their rent is based on a reference rate of 1.5% or more, there is in principle still an entitlement to a reduction, according to the FOH. Indexed rents, graduated rents and turnover-based rents are not subject to these rules.

Key figures

  • 0%: SNB policy rate, in force since 20 June 2025 and held on 24 September 2026.
  • -0.05%: SARON at the close on 29 October 2026, according to the SNB.
  • 1.84%: PostFinance's minimum indicative rate for a 10-year fixed-rate mortgage, as of 30 October 2026.
  • 1.31%: average rate on mortgage claims as of 30 June 2026, according to the FOH.
  • 1.25%: reference rate for rents, in force since 2 September 2025.
  • 1.75 points: cut in the policy rate since the start of 2024, according to the SNB in November 2025.
  • Around 20 basis points: rise in the average spread between published mortgage rates and swap rates since 2024, according to the SNB in November 2025.

What we don't know yet

  • The SNB's next policy rate decision. Its Bulletin 3/2026 describes uncertainties that remain high, particularly because of the situation in the Middle East.
  • The next average rate on mortgage claims and the resulting reference rate: the FOH plans to publish them on 1 December 2026.

Sources