Residential Mortgages: Resilient, Accessible, and Still Competitive

Residential lending remains the backbone of the Swiss mortgage landscape, accounting for 61% of total market activity. This segment continues to benefit from:

• Transaction volumes back to pre-COVID levels, thanks to delayed refinancings (notably post-Credit Suisse merger) and new developments entering the market.
• A 5% increase in average loan size, now at CHF 684,000 — reflecting both price evolution and borrower confidence.
• Highly competitive SARON rates (as low as 1.19%) that offer meaningful savings vs. traditional fixed-rate options.

But perhaps the most important insight: Borrowers still have access to great deals, even if lender competition is shrinking. The interest rate spread between the best and worst offers has now exceeded 1%, equating to potential savings of over CHF 9,000 per year — simply by choosing the right lender.

Investment Properties: Headwinds and a Cautious Outlook

In stark contrast, the investment mortgage segment remains subdued:

• Growth is flat, with fewer transactions and limited institutional appetite.
• Bank valuations trail market prices by ~25%, complicating financing efforts — especially for properties above CHF 15 million.
• Regulatory pressure (notably Basel III capital rules) and lower loan-to-value thresholds are making refinancing larger commercial assets increasingly difficult.

The result? Many traditional lenders are pulling back from non-core or higher-risk asset classes such as retail, office, and industrial properties. Only a minority of banks are still actively pursuing these deals, particularly beyond their home regions.

Bank Margins, Rates & Lender Landscape: What to Watch

• SARON-based financing remains the most cost-effective option — but surprisingly, 89% of borrowers still opted for fixed-rate mortgages in Q1.
• Margins have normalized at around 1%, after sharp increases in 2024.
• Approval rates remain high at over 95%, debunking the myth of a closed credit market — at least for residential borrowers.

What’s changing, however, is how many lenders are still in the game. Regional banks and insurers are increasingly selective, focusing on core geographies and low-risk profiles. Cantonal lenders tend to stay within their canton, and many national players are tightening their credit appetite, especially for commercial deals.

Regional Insights

Want to know where the most activity is happening?

The report also breaks down the market region by region, highlighting contrasts between high-growth areas like Zürich, Bern, and Basel, and more cautious regions such as Ticino, Uri, and Graubünden.

Download the full Q1 2025 Resolve Swiss Mortgage Market Report to access:

• Deep dives on residential vs. investment segments
• Detailed rate and margin breakdowns
• Lender competition and approval trends
• Regional performance and risk profiles
• Strategic insights for borrowers and investors