Which is cheaper: SARON or a fixed-rate mortgage?

Over long periods, money market and SARON mortgages have been cheaper on average, because you pay no premium for rate certainty. In exchange you carry the risk yourself: if the reference rate rises, your payment rises within weeks. The fixed-rate mortgage is the insurance against that, and insurance costs.

Can I switch from a SARON to a fixed-rate mortgage?

At most banks yes, often at the next settlement date. But drop the timing illusion: by the time rates rise, fixed mortgages have long risen with them. Switching protects you from further increases, not from the one that has already happened.

Which term should I choose?

As long as you need planning certainty and are willing to commit. Long terms protect against rising rates but make an early exit expensive, say on a sale, a separation or a job move abroad. If you need flexibility, shorter terms or SARON serve you better.

Does the model change anything about affordability?

No. The bank always tests affordability with an imputed interest rate of around 5 %, whether you take SARON at 1 % or a ten-year fix at 2 %. The model determines your actual costs, not your buying limit.

Huusfink Guide21 August 2026

Fixed-rate, SARON or variable: which mortgage suits you?

Fixed, SARON or variable: the model decides how much you really pay and how soundly you sleep. It does not decide how much house you can afford, because the bank always calculates with 5 %.

The three models in one sentence each

→Fixed-rate mortgage: rate and term fixed, usually 2 to 15 years. Full predictability, expensive exit.
→SARON mortgage: the rate follows the Swiss reference rate SARON plus the bank's margin. Usually cheaper, but it moves.
→Variable mortgage: no fixed term, can be terminated at any time, by far the most expensive. Today a niche solution for transition phases.

Fixed-rate: security with a price tag

You know your interest costs to the franc, down to the last day of the term. You pay for that certainty twice: with a rate premium over SARON and with the commitment. Exit early and you owe the bank an early repayment penalty that can reach several tens of thousands of francs on long remaining terms. Fixed-rate mortgages suit budgets without slack, and people who don't want to check their account every time interest rates make headlines.

SARON: cheaper on average, open-ended curve

A SARON mortgage consists of the reference rate plus a fixed margin of usually 0.5 to 1 %. Settlement is generally quarterly, so your rate moves with the market. Historically, money market models came out cheaper on average than fixed mortgages over whole rate cycles; individual years can still turn out considerably more expensive. SARON fits if your budget can absorb a rate rise of two percentage points without getting tight.

The tranche trap

Banks like to propose splitting the mortgage into two or three tranches with different terms. That smooths the interest rate risk, but has a rarely advertised side effect: as long as one tranche is running, you can hardly switch to another bank, because no new bank takes over only part of a mortgage. Staggered terms tie you to the lender and weaken your negotiating position at every renewal. If you split, keep the end dates close together.

And affordability?

For your buying limit, the choice of model is irrelevant: the bank always calculates affordability with an imputed rate of around 5 % plus maintenance plus amortisation. That is not harassment but the stress test that ensures you survive the expensive scenario too. Choose the model by how much of the gap between 5 % and the real rate you want to buy as security.

Frequently asked questions

The mortgage calculator shows you interest, amortisation and running costs per month, at the real rate and at the imputed one.

Calculate monthly costs