The successor to the Libor mortgage
SARON mortgage
from 0.55 % + SARON
5-year fixed-rate mortgage
from 2.28 %
10-year fixed-rate mortgage
from 2.34 %
15-year fixed-rate mortgage
from 2.46 %
These interest rates are for illustrative purposes only and are updated regularly (status as of 24.09.2023, 06:00 pm). They do not constitute a binding financing offer.
The interest rates shown were determined by UBS key4 mortgages on the basis of the following financing parameters: canton: Zurich, loan amount: CHF 500,000, affordability: 24%, loan-to-value ratio: 50%, Special condition: sustainability certificate, mortgage payout date: 25.09.2023.
The SARON mortgage interest rate comprises the SARON rate, plus the margin.
A SARON mortgage is a money market mortgage based on SARON (Swiss Average Rate Overnight). SARON has existed since 2009 and is calculated based on completed transactions and binding quotes (buy and sell prices) posted on the Swiss repo market.
The calculation method was developed by SIX Group AG (SIX) and the Swiss National Bank (SNB).
SARON is valid for the interest period from the current day until the following morning. To avoid having to pay interest every day, UBS key4 mortgages offers interest periods of three months. To determine the interest rate for the relevant period, SIX offers the reference interest rate “SARON Compound.” This is calculated from the average of daily compounded SARON interest rates, to which an agreed margin is added. This means that the interest payment amount is determined at the end of the interest period rather than at the beginning.
Compared to a fixed-rate mortgage, in a normal interest environment the interest rate of a SARON mortgage is generally lower, although it can change quickly. That is why a SARON mortgage is suitable for you if you actively follow developments on the money and capital markets, expect interest rates to stay the same or go down, and can cope with the financial consequences of interest rate fluctuations.
Since the financial crisis, banks have increasingly been lending to each other only against collateral. Consequently, for many loan periods, no truly unsecured transactions are concluded at all and prices can only be estimated. As a result, the Libor rate is no longer as meaningful and is no longer suitable as a reference rate in the longer term.
There are two main differences between Libor and SARON.
For a SARON mortgage, this means that unlike for a Libor mortgage, the interest rate and thus the interest payment has to be calculated on the second to last day of the interest period, and not at the start of the period.
