Swiss mortgage rates rise amid capital market rate increases
What happened
Mortgage costs in Switzerland increased during the third quarter compared to the previous three months. This rise was primarily caused by higher interest rates in the capital markets, which drove up banks’ refinancing costs. At the end of September, the indicative rate for a ten-year fixed-rate mortgage stood at 2.07% for Switzerland.
From swissinfo.ch
Why it matters
The increase in capital market rates is making fixed-rate mortgages more expensive in Switzerland, even though the Swiss National Bank keeps its key interest rate at 0%. A financial expert noted that while the Swiss National Bank is unlikely to raise rates soon due to low inflation, the weakness of the franc and rising energy prices increase the possibility of monetary policy tightening.
The Swiss National Bank is managing monetary policy for Switzerland.
From swissinfo.ch
Who's involved
- SwitzerlandThe country where mortgage costs and capital market rates are rising.
- Swiss National BankThe central bank influencing monetary policy and capital market rates.
- FEDA foreign central bank whose higher interest rates are impacting the Swiss capital market.
- UBSA Swiss multinational investment bank that could face higher refinancing costs.
- Credit SuisseA Swiss multinational banking institution that could face higher refinancing costs.
- European Central BankThe central bank of the European Union whose monetary policy landscape is being compared.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- UBSSpeculative
UBS could face higher refinancing costs due to rising capital market rates.
- Credit SuisseSpeculative
Credit Suisse could face higher refinancing costs due to rising capital market rates.
Possible ripples
Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.- Credit Suisse may face higher refinancing costs from rising Swiss ratesCredit Suisse may face higher refinancing costs due to rising Swiss capital market ratesLikely
- SNB rate influence may affect Swiss franc stabilityThe Swiss franc's value may be affected by SNB's policy tightening likelihoodPossible
- Rising Swiss capital market rates may increase UBS's refinancing costsUBS may face higher refinancing costs due to rising Swiss capital market rates.Possible
Keep exploring
The entities involved
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Switzerland
country in Central Europe
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Swiss National Bank
central bank of Switzerland