SARON vs. Fixed-Rate Mortgage: Which One Should You Choose?
Understand the mortgage types available in Switzerland and how to weigh certainty against cost.
6 min read · Mortgage & Property
The Swiss mortgage market has two main products.
Fixed-rate mortgage
The rate is locked for 2 to 15 years. Longer terms normally cost more. You get stable payments and protection against rising rates, but leaving early triggers a penalty that can be significant if rates have dropped. Many borrowers stagger several tranches with different expiry dates to spread refinancing risk.
SARON mortgage
The rate equals the Swiss Average Rate Overnight plus a bank margin, adjusted every three months. When the SNB cut its policy rate to 0 % in 2025, SARON borrowers benefited. The risk is that costs rise quickly if the SNB tightens. A SARON loan is usually flexible and can be switched to a fixed rate.
- Total interest, fixed
- Total interest, SARON
Example with default values. Open the calculator →
How to decide
- Risk tolerance: could you cope with payments rising by 2–3 percentage points?
- Time horizon: a sale or renovation in the next 3–5 years favours SARON.
- Yield curve: if fixed rates are far above SARON, you pay a premium for certainty.
Model scenarios with the SARON vs. fixed calculator and compare multiple lenders; margins differ by more than most people expect. Mortgage brokers and online platforms can help, and you can negotiate.