Pension funds overtake insurers: What the structural shift in the mortgage market means for borrowers

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The Swiss mortgage market experienced a structural shift in 2025 that has permanently changed the hierarchy of provider groups. Pension funds have overtaken insurance companies as the second most important group of mortgage lenders after banks. Banks still account for about 90 percent of the market, but within the remaining non-bank providers, the order has been reversed. The 2025 mortgage market study by MoneyPark and Helvetia documents the development: Pension funds increased their mortgage volume by 8 percent last year to 34 billion francs, narrowly overtaking the insurers with 33 billion francs. Ten years ago, pension funds held only 14 billion francs. The total market grew by 3.1 percent in 2025 and, at 1310 billion francs, exceeded the 1.3 trillion mark for the first time.

This is not just a statistical issue. It changes the landscape in which borrowers negotiate their mortgages. Where previously a comparison between a bank and an insurer was sufficient, today the pension fund appears as a distinct and growing group of providers. For existing customers facing refinancing and for first-time buyers with substantial equity, the additional comparison can pay off in concrete francs.

Why pension funds are increasing now

The investment pressure on pension institutions is the driving factor. With a central bank rate at zero percent, Swiss franc bonds yield hardly any attractive returns. Direct mortgage engagements, on the other hand, offer predictable cash flows over 5, 10 or even 15 years, in a segment with historically low default rates. In addition: mortgages at pension funds have comparatively moderate regulatory requirements, improving the return on invested capital.

At the same time, the large collective foundations and some company pension funds have expanded their operational structures. Whereas in the past they only granted mortgages to their own insured members, today they also operate on the open market via specialized intermediaries or their own channels. Access for outsiders has noticeably broadened, although the offering remains selective.

Who actually gets access

Not every pension fund is open to every borrower. Broadly, there are three categories. The first are the classic company pension funds, which only grant mortgages to active and retired members of the affiliated company. This group is large in number, but irrelevant for outsiders.

The second category consists of collective foundations and investment foundations that are actively expanding their mortgage business and, through intermediaries or direct acquisition, are also open to non-members. Several large investment foundations owned by insurance and banking groups as well as independent collective foundations now operate specialized mortgage desks. The third category are investment platforms that, on behalf of several institutional investors—including pension funds and insurers—offer standardized mortgage products. For the borrower, it is not always apparent which institution is actually providing the funding.

Practical rule of thumb: Anyone interested in a pension fund mortgage will most efficiently find relevant offers through an independent mortgage broker or online comparison platform. Direct access to an individual pension fund is possible, but time-consuming.

How pension fund offers differ from banks and insurers

The three provider groups have different calculation logics, which is reflected in interest rates, flexibility, and requirements.

On interest rates, pension funds and insurers are regularly 20 to 60 basis points below the posted rates of major banks for low loan-to-value ratios. The advantage shrinks when the loan-to-value exceeds 66 percent or if the borrower's profile does not match the preferred standard pattern. The interest advantage of pension funds over insurers is usually minimal, but in some segments can be 5 to 10 basis points.

For affordability calculations, all three groups use a notional interest rate of 4.5 to 5 percent, as established by the Swiss Bankers Association's self-regulation standard. Pension funds and insurers are sometimes stricter in practice here, as they model risk conservatively. The one-third rule for affordability is the minimum threshold for all three groups.

When it comes to flexibility, the advantage clearly lies with the banks. Extra repayments, early contract terminations in the event of a sale, lenient treatment in case of divorce or inheritance: all these are easier with banks, due to the broader customer relationship. Pension funds and insurers generally process mortgages on a purely transactional basis. Anyone assuming they might sell the property during the term should compare prepayment penalties carefully.

When comparing with a pension fund is worthwhile

There are three scenarios in which comparing with a pension fund mortgage translates into tangible interest savings.

First: Refinancing at low loan-to-value. If you have completed your initial fixed term, made repayments, and have seen the property's value rise, your loan-to-value is often below 60 percent. It is precisely in this segment that pension funds are most active in acquiring customers.

Second: First-time buyers with substantial equity. Anyone who, after inheritance, bonus, or sale of an existing property, starts with a loan-to-value of 55 to 65 percent is a dream profile for institutional providers. The interest advantage of 30 to 50 basis points adds up to a five-figure sum over a ten-year term.

Third: Long-term fixed-rate mortgages over 10 years. Pension funds often price long terms more aggressively than major banks, as they have a natural demand for such lengthy investments. With a 15-year fixed-rate mortgage, the terms advantage can be even greater than with a 10-year mortgage.

Practical tips for comparing

If you include a pension fund mortgage in your financing strategy, you should keep three points in mind.

First: Obtain concrete figures. Pension funds rarely publish guideline rates. The actual terms only become visible after a loan request. Without an offer, the comparison is speculation.

Second: Use brokers. Independent mortgage brokers and comparison platforms have access to a wide range of institutional providers. Those who only go through a single provider systematically miss out on the full range.

Third: Negotiate renewal terms. The biggest drawback of institutional mortgages is the weaker negotiating position when refinancing. It pays to check the contract: Does it contain commitments for renewal, or is the renewal negotiated separately and without being binding? Those who signal to the provider that they're willing to switch providers under time pressure often achieve better terms than loyal customers who passively accept the extension.

What the structural change means in the long run

The current shift is not a random blip. As long as the central bank keeps interest rates low and real estate prices continue to rise, pension funds are likely to expand their mortgage business. For borrowers, this structurally means more competition, more ways to compare, and generally lower margins for all providers.

Banks won't become obsolete. They remain the go-to address for complex situations, loans above the 66 percent threshold, and customers with comprehensive banking relationships. The habit of automatically renewing a mortgage with your main bank has become expensive in the new market environment. A conscious three-way comparison—bank, insurer, and pension fund—is now part of financial best practice.

Sources

• MoneyPark and Helvetia: Mortgage Market Study 2025 (PDF)
• MoneyPark: Pension Institutions in the Mortgage Market, December 2025 (PDF)
• Swiss National Bank: Monetary Policy Decisions
• Swiss Bankers Association: Self-regulation, Guidelines regarding minimum requirements for mortgage financing