Fixed or SARON: a question of risk, not of forecasting
The choice is usually discussed as a bet on where rates are going. It is not one. What matters is how much variation your budget absorbs, and how long you are willing to be tied in.
What separates the two
- A fixed mortgage locks the rate for the whole term, customarily two to ten years. Your cost is then known to the franc.
- A SARON mortgage tracks the short-term Swiss money-market reference rate and is settled periodically, usually quarterly, plus a contractually fixed margin.
- Leaving a fixed mortgage early is expensive: the bank charges an early-repayment penalty, which can be substantial if rates have fallen.
- A SARON mortgage can usually be ended at the next interest date, but it stays bound by the term of the framework agreement.
The more useful question
Do not work out which is cheaper today. Work out what happens if the rate rises by two percentage points. If your household still holds, SARON is defensible. If it gets tight, a fixed mortgage buys you planning certainty, in the way an insurance policy does.
Splitting the loan into two or three tranches with different maturities keeps the whole mortgage from renewing in a single, possibly unfavourable, year.
These articles set out Swiss law in general terms and are not a substitute for legal advice on an individual case. Cantonal rules differ. In a dispute, contact the rent conciliation authority or a lawyer.