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How is the variable mortgage interest rate calculated?

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Unlike a fixed-rate mortgage, a variable-rate mortgage offers much greater flexibility: there is no predefined mortgage term, which means that the mortgage contract can be canceled at any time, provided the mortgage holder complies with any period of notice stipulated in the contract. This can be particularly useful in cases where it is anticipated that a property will soon be sold, or for any other situation in which transitional financing is the most practical solution. Read more about variable mortgages here.

Today’s best MoneyPark rates

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Banks set variable interest rates

Until autumn 2008, Switzerland’s variable mortgage interest rate was used to set the benchmark for the calculation of property rental rates. As a result, the variable interest rate was subject to a considerable amount of political influence. However, with the introduction of the reference interest rate, the variable mortgage interest rates has become less important, allowing banks greater freedom to set their mortgage interest rates. The composition of variable mortgage interest rates is therefore extremely non-transparent when compared to LIBOR mortgages, and, unlike other mortgage products, does not take the creditworthiness of each client into account. Thus everyone pays exactly the same rate of mortgage interest. Since the decoupling of variable mortgage rates from property rental costs, the variable interest rate has barely changed. As our interest rate development tool shows, the variable mortgage interest rate has remained stable at around 2.7% ever since 2008.

Current mortgage rates

LIBOR mortgage from 0.56%
Fixed-rate 10 years from 1.18%
Fixed-rate 5 years from 0.76%

The displayed interest rates are the best rates currently available. Your personal interest rates may vary depending on LTV, affordability, mortgage amount and the location of the property.