Mortgage rates at a one-year low: Why now is the zime to look at your renewal

Where rates stand today

Effective mortgage rates edged down again in July. Benchmarks as of early July 2026: around 1.2 percent for five-year and around 1.45 percent for ten-year fixed-rate mortgages – lower or higher depending on the lender, loan-to-value ratio and affordability. SARON mortgages also remain cheap thanks to the 0 percent policy rate, but offer no interest-rate certainty. What stands out is less the level itself than its stability: rates have moved within a narrow band since the summer of 2025. Over a twelve-month horizon, most banks expect only slight upward pressure – though there are no guarantees. For negotiations, your overall package also counts: loan-to-value, amortisation plan and the wider client relationship often influence the offer more than the published shop-window rates.

Why rates are so low – and what could move them

The main driver is monetary policy: with a policy rate of 0 percent and low inflation, banks’ refinancing remains cheap. Added to this is intense competition among mortgage providers, including insurers and pension funds vying for mortgage volume. Movement could come from two directions: if inflation picks up unexpectedly, longer maturities will rise first. If the economy weakens sharply, discussions about negative interest rates could even resurface. Neither is currently the main scenario – but precisely this uncertainty argues for making decisions deliberately rather than under time pressure.

Mortgage expiring? Use the window actively

Many owners only take action a few months before their fixed-rate mortgage expires – and give away negotiating room as a result. The smarter approach is the reverse: at the latest twelve, ideally eighteen months before expiry, you should know which strategy you want to pursue. That includes an honest assessment: How has the value of your property developed? Is the loan-to-value ratio still accurate, or could the increase in value even justify a better rate? Does the term match your life planning – think retirement, sale or transfer to your children? Those who enter negotiations well prepared and compare offers from several providers quickly save several thousand francs over the term. Also consider whether splitting into two tranches makes sense – for example a five-year and a ten-year term: this spreads the interest-rate risk, but also ties you to the same provider for longer, since switching is only possible when both tranches expire at the same time.

Forward mortgage: lock in today’s rate for later

With a forward mortgage, you secure today’s interest rate for a mortgage that only starts in several months’ time – depending on the provider, up to 24 months ahead. Banks charge a premium for this, which increases with the lead time. In periods of low interest rates, it works as insurance against rising rates: if your mortgage expires in autumn 2027, for example, you can lock in the current level plus the forward premium now. Whether it is worthwhile depends on your personal situation: those who want to sleep soundly and have a tight budget are often happy to pay the premium. Those who want to stay flexible or expect rates to remain stable tend to wait. What matters is making the choice consciously – and comparing the premiums of different providers, as they vary considerably.