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Contrary to the trend among the central banks of many countries, the Swiss National Bank (SNB) has left its policy rate unchanged for the fifth time in a row. It has now stood at 0.0 percent since June 2025.
The announcement was made on 24 September by the SNB at a media briefing. The policy rate of 0.0 percent applies for the next three months. Only a week earlier, the US Federal Reserve had raised its new target range by 0.25 points, which now stands at 3.75 to 4.0 percent.
Martin Schlegel, the Director of the SNB, said in his inflation forecast: “Inflation rose slightly, from 0.6 percent in May to 0.8 percent in August. This increase was due to a rise in goods inflation, which in August moved back into positive territory for the first time since May 2024. The increase in goods inflation was driven above all by higher prices for petroleum products.” The SNB forecasts a further increase in the fourth quarter before it declines again in 2027. The conditional inflation forecast remains within the range of price stability. For 2026 it stands at 0.7 percent.
As Switzerland’s central bank, the SNB is committed to price stability in the country. With its monetary policy, it sets the guardrails needed to preserve the value of money for people and businesses in Switzerland and to support the domestic economy.
The European Central Bank (ECB) also raised its key interest rate by 25 basis points on 10 September, for the second time in a row, bringing it to 2.5 percent. Before this increase, the key interest rate had remained unchanged at 2.0 percent seven times in a row. The ECB Governing Council justified the increase in particular with the conflict in the Middle East, which continues to generate inflationary pressure. ECB experts assume average headline inflation in the eurozone of 3.0 percent in 2026, 2.5 percent in 2027 and 2.1 percent in 2028. With this decision, the ECB seeks to promote a monetary policy “that ensures inflation stabilises at its 2 percent target over the medium term”.
In Switzerland, by contrast, inflation continues to move at a low level: compared with the respective previous month, it stood at 0.6 percent in April and May, 0.5 percent in June and 0.4 percent in August. The Swiss consumer price index (CPI) reached a level of 101.5 points in August 2026 (December 2025 = 100).
The SNB equates price stability with an increase in the Swiss consumer price index (CPI) of less than 2 percent per year. Medium-term inflationary pressure has increased only slightly, says Martin Schlegel. “Assuming a constant SNB policy rate of 0 percent, the inflation forecast remains within the range of price stability over the entire forecast horizon. The SNB has therefore decided to leave the policy rate unchanged. He added:”Since our last monetary policy assessment, the Swiss franc has lost around 3 percent of its value on a trade-weighted basis. This depreciation was in line with the widening of interest rate differentials between the major currency areas and Switzerland. Longer-term interest rates in Switzerland have indeed risen somewhat, but less sharply than in the major currency areas.”
This quarter, too, the markets had expected the zero interest rate decision. Low interest rates are intended to continue supporting the economy. Raiffeisen bank concludes in its interest rate forecast of September 2026: “The global economy is defying the energy crisis triggered by the Iran war. In Europe in particular, companies are proving resilient after years of strong economic headwinds. In Switzerland, too, the signs of a consolidating recovery are increasing. At the same time, price pressure remains low. Apart from oil products, hardly any increase in inflation can be discerned.” The SNB is currently less concerned about upside risks to inflation than about the strength of the Swiss franc.
However, the strength of the franc has also eased somewhat. Seasonally adjusted gross domestic product (GDP) grew by 1.5 percent in the second quarter compared with the previous quarter. “This is the strongest GDP growth since the third quarter of 2021,” the State Secretariat for Economic Affairs SECO announced on 3 September. The experts at Reuters assess this development as follows: “This suggests that the Swiss economy is performing very well.” Because the franc has fallen by around 2 percent against the euro since the last decision, this could lead the SNB to formulate its stance on foreign exchange market interventions in a more balanced way again and merely state that it is prepared to intervene in the foreign exchange market if required.
Raiffeisen bank draws the conclusion that there is currently no need for action either on the foreign exchange market or on policy rates. “The SNB is in a very good starting position and can wait. For the time being, this points to largely stable mortgage interest rates.”
The Zürcher Kantonalbank (ZKB) also judged on 16 September: “We continue to assume that the SNB policy rate will be at 0 percent at the end of 2026.” According to the assessment of its experts, a window for higher interest rates could only open for the SNB in the new year.
The zero interest rate policy – particularly in combination with a somewhat weaker Swiss franc – is of interest above all to the export-oriented economy, since buying Swiss goods remains attractive for foreign companies. Imported goods and services, on the other hand, may tend to become more expensive with a weaker franc, for example fashion items, electronic devices or trips abroad.
The reference interest rate for rents was last lowered at the beginning of September 2025, to 1.25 percent. It has remained at this level for a year. The value is set every three months by the Federal Housing Office, most recently on 2 September 2026. Tenants who pay a rent that, according to their rental agreement, is based on a reference interest rate of 1.5 percent or more can submit a request for a rent reduction to their landlord. The mortgage reference interest rate for rents reacts far more slowly than the policy rate and does not follow it automatically. The Federal Housing Office will next announce the reference interest rate on 1 December 2026.
Mortgage interest rates have tended to rise slightly over the period of one year. In June 2025, a five-year fixed-rate mortgage cost an average of 1.31 percent interest. This interest rate has now risen and, as at 22 September 2026, averages 1.81 percent across all providers.
If you have financed your home with a SARON mortgage, little changes, because the SARON is linked to the policy rate. A SARON mortgage currently costs (as at 21 September 2026) at least 0.84 percent (-0.04 percent* plus a margin of 0.8 to 1.3 percent, which depends on the customer’s creditworthiness).
If you have financed your residential property with a fixed-rate mortgage or would like to finance your property purchase with a fixed-rate mortgage, little continues to change. Mortgage interest rates already fell significantly in 2024 and, despite a general upward trend, remain low by historical standards.
Low interest rates open up scope in the financing of a house or an apartment. Property prices remain high because of immigration pressure, limited land and the scarce supply of available housing. The cost of property is likely to continue rising, while mortgage interest costs are more likely to move sideways or rise only slightly. At present, a five-year fixed-rate mortgage is already available from the cheapest provider for 1.42 percent.
The favourable interest rate environment means that taking out a mortgage remains attractive for homeowners and buyers from a financing perspective. Historically, a SARON mortgage is usually cheaper than a fixed-rate mortgage. The period between October 2023 and December 2024 was an exception.
The SARON reference interest rate is directly linked to the policy rate and can fluctuate. SARON mortgages are therefore suitable for homeowners who can live with interest rate fluctuations and have a certain amount of financial leeway. A fixed-rate mortgage, by contrast, is exposed to fewer fluctuations. It is recommended for homeowners who value a high degree of security and want to budget precisely over the long term.
Demand for property remains high. The UBS Real Estate Bubble Index assesses the risk of a possible property bubble in Switzerland. In August 2026 it reported an increase in prices for residential property of 2.4 percent in the second quarter of 2026 compared with the previous year. Compared with the previous quarter, it rose from 0.62 to 0.72 index points. The risk of a property bubble continues to be assessed as moderate. The index remains well below the level of the early 1990s (2.34), when property in Switzerland lost up to 40 percent of its value.
Although per capita income in Switzerland is barely growing, UBS expects “robust demand for residential property” in the coming quarters. For 2026 as a whole, its property experts anticipate nominal price growth of 3.5 to 4.0 percent. According to them, a sharp price correction would only be expected if a stagflation scenario were to occur in Switzerland – a combination of a barely growing or shrinking economy, rising prices and rising unemployment at the same time. At present, however, there is no reason to expect such a scenario, and the risk of a property bubble in Switzerland is assessed as very low.
In its property forecast of September 2026, Zürcher Kantonalbank ZKB expects 45,000 newly built apartments in Switzerland in 2026. In 2024 and 2025, around 40,000 apartments were built in each year. For residential property prices, the bank sees an increase of 3.5 percent across the whole year, as it did in its assessment in the previous quarter.
Most market participants had expected the SNB’s zero interest rate round. Petra Tschudin, member of the SNB’s Governing Board, confirmed the positive outlook for Switzerland at the media briefing of 24 September: “In Switzerland, gross domestic product (GDP) grew exceptionally strongly in the second quarter.” For 2026 as a whole, the Swiss National Bank currently expects growth of between 1.5 and 2 percent. “This forecast, which is higher than at the last monetary policy assessment, mainly reflects revised GDP data for 2025 and the surprisingly strong growth in the second quarter of 2026. For 2027 we continue to expect growth of around 1.5 percent.”
From the SNB’s point of view, uncertainty regarding inflation and economic developments remains high, particularly with regard to the development of energy prices and the effects resulting from it. Fundamentally, however, inflation remains comparatively low, as Martin Schlegel says. “Since our last monetary policy assessment in June, inflation has risen further. This increase mainly reflects higher energy prices. Despite this development, inflation in Switzerland, at 0.8 percent, is relatively low by international standards.” The situation will continue to be monitored and monetary policy adjusted if necessary in order to keep monetary conditions appropriate. “In doing so, we are also prepared to intervene in the foreign exchange market if required.”
Forecasts for the future development of mortgage interest rates can only be made within a certain range. Following the surprisingly sharp reduction in the SNB policy rate in December 2024, interest rates are likely to continue moving sideways, as they have for more than a year, with only a slight upward tendency. The guardians of the currency will publish their next monetary policy assessment in December 2026.
Our mortgage interest rate forecast up to the end of 2026:
Long-term studies show that, in the past, money market mortgages such as the SARON mortgage were cheaper than fixed-rate mortgages. From October and November 2023 respectively until January 2025, however, short- and long-term mortgages were cheaper than a SARON mortgage. This exceptional phase ended in January of this year.
Mortgage conditions remain favourable. It is still an attractive time to finance a house or an owner-occupied apartment on favourable terms over the long term. A look at the historical development of mortgage interest rates suggests that it may currently be worth considering a fixed-rate mortgage with a longer term of 5 or 10 years to finance residential property.
When deciding on particular mortgage models, you should always take your own family and financial situation into account and seek advice from a specialist – for example from our property experts. Our rent-to-buy model can also be an interesting alternative: with the smart rent-to-buy model, you can fulfil your dream of owning a home today, even if you only bring 10 percent of your own funds.
Note: because imputed rental value will be abolished in Switzerland from 2028 at the earliest, the ideal financing strategy may change considerably from case to case. We recommend that you address financing and renovation questions relating to residential property promptly. Also read our blog post on the abolition of imputed rental value.
How do buyers and owners find the right mortgage strategy?
It makes sense for homeowners not to stake everything on a single mortgage. It is better to spread the financing across different mortgage models and terms. This way you diversify your interest rate risk and minimise the danger of having to renew the entire sum at the most unfavourable moment, for example during a high interest rate phase. This mix is recommended for many homeowners:
The UBS Real Estate Bubble Index assesses the current situation as promising for homeowners who are willing to sell: for 2026, UBS expects a price increase of 3.5 percent for owner-occupied homes. If you are planning to sell residential property, now is a good time. To do so, it is worth making use of our free sale price consultation or our broker recommendations, for example. Our property experts advise you independently and recommend brokers who have sound knowledge of the property market in your region and who will competently guide you through the sales process at all times.
How you finance or refinance your residential property depends on far more factors than just the current interest rate. Your personal and financial situation, your plans for the future, your risk capacity and your assessment of mortgage interest rate developments play at least as important a role in choosing the right mortgage model and the right terms.
Important: when choosing the ideal financing for your residential property, be sure to check how the abolition of imputed rental value will affect your financial situation.
Seek advice from a specialist and compare offers, services and prices. The offer that appears cheapest at first glance is not always the best one for you.
Would you like to buy residential property, or is the renewal of your mortgage coming up soon? Use our mortgage comparison to compare mortgage models, terms and interest rates and flexibly combine the most attractive offers. For example a fixed-rate mortgage with an insurance company and a SARON mortgage with a bank. This way you benefit from the best conditions on the mortgage market and save a lot of money.
