Mortgages More Expensive Despite Zero SNB Rate: How to Negotiate Better Terms

The paradox: zero policy rate, pricier mortgages

Since June 2025, the Swiss National Bank has held its policy rate at zero percent. In theory, mortgage borrowers should now enjoy historically cheap conditions. Reality looks different. According to comparison platforms, the average margin on SARON mortgages (the Swiss money-market reference rate) has risen from around 0.9 to 1.1 percent since the end of 2024. Fixed-rate mortgages today sit at a similar level as before the SNB's last two rate cuts. Anyone signing or renewing a mortgage in spring 2026 ends up paying more, even though the policy rate has fallen. Zurich Cantonal Bank (ZKB) most recently adjusted its reference rates on 25 April 2026, confirming the trend.

How banks build their interest rate

Banks do not refinance their mortgage books exclusively via the SNB rate. They use a mix of customer deposits, Pfandbriefe (Swiss covered bonds) and short-term funding. On top of these refinancing costs they add a margin that covers capital costs, risk premiums and profit. The effective mortgage rate is therefore not a mirror of the policy rate, but the result of two moving parts: the market rate (such as SARON or the swap curve) and the individually negotiated margin. It is precisely on the margin that Swiss institutions have raised their prices in recent months.

Three drivers behind the higher margin

Basel III final. The stricter capital rules that came into force in early 2025 make mortgage lending more expensive for banks. Every outstanding franc must now be backed by more regulatory capital, and that feeds directly into pricing. The relief for owner-occupied financing flagged in the federal report has not arrived in practice.

Geopolitical risk premiums. Uncertainty around US tariffs and the Middle East has lifted risk premiums on bond markets globally. Swiss banks, which refinance in part through Pfandbriefe, pass these surcharges on to mortgage clients.

Weak competition. Pension funds and large insurers have been holding back from new mortgage business for over a year. That removes the competitive pressure that used to cap bank margins. Anyone collecting offers notices it quickly: the spread between providers has widened.

Who is affected, and by how much?

On a SARON mortgage of CHF 800,000, a margin increase of 0.2 percentage points means an extra cost of CHF 1,600 per year. A 0.4 point increase, as ZKB has reportedly applied in individual cases, adds up to CHF 3,200 per year, or CHF 32,000 over ten years.

Comparison between providers also pays off. Comparison platform Moneyland recently recorded reference margins of around 1.35 percent at Zurich Cantonal Bank, 1.05 percent at PostFinance and 1.0 to 1.1 percent at the Raiffeisen group. That gap of 30 basis points adds up, over ten years and on CHF 800,000 of debt, to roughly CHF 24,000 in extra interest.

Fixed-rate mortgage or SARON: which is cheaper today?

The five-year fixed-rate mortgage is currently offered at reference rates between 1.1 and 1.55 percent, the ten-year between 1.5 and 2.0 percent. A SARON mortgage sits in a similar range, depending on the individual margin. Borrowers seeking planning certainty are not necessarily worse off with a fixed-rate mortgage than with a money-market product, provided the margin has been negotiated tightly.

The choice hinges on two questions: how heavily would a potential rate hike weigh on the household budget, and how likely is another SNB cut? Most market observers expect the policy rate to move sideways in 2026. Meaningful cuts are not on the horizon, so a Tragbarkeit (affordability) stress test should pass comfortably even on a SARON mortgage.

Three steps to a better mortgage

One: collect competing offers. At least three offers from banks, insurers and independent mortgage brokers form a usable benchmark. Cantonal banks outside your home canton belong on the list as well. On a CHF 800,000 mortgage, half an hour of research per offer can save several thousand francs per year.

Two: negotiate the margin specifically. SARON and the swap curve are not negotiable, but the bank margin very much is. A concrete competing offer in hand is the most effective lever. Experience suggests banks will move 10 to 30 basis points for solid borrowers. The same negotiation works inside an existing relationship, especially at the end of a fixed-rate term or when a top-up is planned.

Three: take a switch seriously. Anyone reaching the end of their current term, or holding a SARON mortgage, can switch provider without major obstacles. The administrative effort is manageable, the leverage on total cost is significant. Make sure the Schuldbrief (mortgage certificate registered against the property) is transferred early, that speeds up handover to the new institution. Transfer fees range between CHF 200 and 700 depending on canton and pay back within a few months in any meaningful rate move.

Bottom line

The gap between the SNB policy rate and effective mortgage rates is wider in spring 2026 than it has been in recent years. The main culprits are widened bank margins, driven by tighter regulation, geopolitical risk premiums and thinned-out competition. Borrowers still have room to act. Anyone who compares offers, negotiates the margin firmly and is willing to switch provider can neutralise a substantial share of the extra cost. For deeper reading, see the reporting by the NZZ and the Tages-Anzeiger.