SARON mortgage loan

SARON mortgage loans are a flexible home-financing solution. The interest rate tracks the market, which means that you pay lower interest in a downcycle – but you must also be prepared to pay more when rates rise.

Highlights

The SARON mortgage loan is a competitive solution for financing the purchase of your home. It is a variable-rate loan, and the interest rate is based on the Swiss Average Rate Overnight (SARON).

The interest you pay on this loan varies in line with money-market rates. That means you need to have sufficient liquidity on hand in the event that interest rates rise sharply over the quarter.

It is important to pay close attention to the money market: if rates rise and you decide that the SARON mortgage loan no longer meets your needs, you can switch to another type of mortgage loan at any time.

How does it work?

The interest you pay on this loan has two components: the SARON (an overnight interest rate compounded over three months) and the margin specified in your loan agreement.

Your quarterly interest payment is calculated using the daily rates recorded over a three-month observation period that ends five days before interest is billed.

This means that, at the start of the interest-rate cycle, you do not know the interest rate you will pay.

You can select a term of two to five years.

  1. Observation period
  2. Billing period
  3. Interest rate calculated at the end of the observation period
  4. Interest paid

Comprendre le SARON en moins de 2 minutes

Fees and conditions

 

 Taux et conditions

Currency

CHF

Minimum loan amount

CHF 20,000

Term of loan

2 to 5 years

Margin

Set individually and clearly specified in the loan agreement

Interest rate

SARON compounded over 3 months + margin

Repayment

Usually 1.25% of the loan amount

Your mortgage payments

Quarterly

Your payments cover both interest and principal repayment

Credit Fee Schedule (253,3 kB)

How to limit the impact of rising rates

SARON mortgage loans are subject to a variable interest rate. One way of limiting interest-rate risk is to keep a close eye on both short- and long-term interest rates, and to change mortgage products if the SARON rises too sharply. Another way is to divide your mortgage loan into several tranches, including one with a fixed rate.

Related topics

How does the new SARON benchmark affect my mortgage loan? (in French only)

Interview with Sébastien Roduit, head of real estate at BCV, broadcast on the La Télé channel.

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