Why Interest Rates in Switzerland Remain Low

Context

In short

• SNB has left the reference rate at 0% for over a year.
• Swiss inflation in August at 0.8% on an annual basis.
• 10-year mortgages average 1.9% according to Comparis.

Key facts

• SNB reference rate: 0%
• US reference rate (range): 3.5-3.75%
• ECB reference rate: 2.5%
• Inflation United Kingdom: 2.9%
• Average European inflation: 2.9%
• US inflation: 3.4%
• Japan rate: 1%
• 10 year mortgage loans (Comparis): 1.9%
• Swiss inflation August: 0.8%
• Next SNB review date: 24 September

Lead: The Swiss National Bank (SNB) kept its key interest rate at 0.0%, an exceptionally low level in the global landscape, which has been in place for over a year. This makes loans cheaper but leaves deposits with next to no interest. The next SNB assessment is scheduled for 24 September. In the United States the reference rate is in the range of 3.5-3.75% and the Federal Reserve is expected to increase as early as this Wednesday, the first since 2023, probably followed by another increase. The European Central Bank (ECB) instead raised the rate from 2.25 to 2.5% last Thursday, while the Bank of England remains at 3.75% and is reviewing its policy this week. Inflation in the UK is at 2.9%, just above target, as are the European average (2.9%) and the US average (3.4%). In Japan the rate is 1%. the local central bank is expected to increase it by one point by the end of the week.

Implications for credit and savings

With low interest rates, asking for a loan is advantageous, but the money left in bank accounts yields very little. According to Raiffeisen's Caroline Hilb, the situation results from low inflation and the strength of the franc, as well as strict Swiss debt discipline, of which the debt brake is a pillar. Daniel Kalt of UBS adds that this discipline helps limit public debt and avoid wasting taxpayers' money.

Mortgage loans, however, show a slight increase: according to Comparis, ten-year mortgages are on average at 1.9%. Hilb points out that this increase follows international trends and is not immune to shifts in US rates, even if the increase was "significantly smaller" than in other European countries or the US.

Despite the international backdrop, there is no pressure for a rate increase in September. Kalt says Swiss inflation, stuck at 0.8% year-on-year in August, is still too low to justify a crackdown. Hilb agrees, noting that inflationary pressure remains insufficient and the franc too stable to intervene in key rates.

Link to cost-of-living

Operational details

Analisi pratica: cosa significano questi tassi bassi per le famiglie e le imprese svizzere? Un tasso di riferimento allo 0% riduce il costo del capitale per le imprese che intendono investire in macchinari o espansioni, mentre le famiglie trovano più accessibili i finanziamenti per l’acquisto di una casa o la ristrutturazione. Tuttavia, la remunerazione dei depositi rimane minima, spingendo molti risparmiatori verso alternative come obbligazioni corporate o fondi pensionistici.

Confronto con i paesi vicini

Negli Stati Uniti e nell’area euro, i tassi di riferimento sono rispettivamente nella forchetta 3,5‑3,75% e al 2,5%, con inflazioni più alte (2,9‑3,4%). Questo differenziale rende il franco più forte rispetto all’euro e al dollaro, sostenendo il potere d’acquisto delle importazioni ma penalizzando le esportazioni. La forza del franco è citata da Caroline Hilb come uno dei motivi per cui la BNS può mantenere i tassi bassi senza rischiare un surriscaldamento inflazionistico.

Per quanto riguarda il mercato immobiliare, l’aumento contenuto dei mutui a 10 anni (1,9%) indica che, nonostante la pressione al rialzo osservata negli USA, il costo del finanziamento abitativo in Svizzera resta relativamente basso rispetto a molti paesi europei, dove i tassi superano spesso il 2,5‑3%. Questo può sostenere la domanda di abitazioni, soprattutto nelle zone urbane di Zurich, Geneva e Basel, sebbene l’offerta sia limitata da regolamenti edilizi elevati.

Infine, la bassa inflazione (0,8% in agosto) riduce l’urgenza di interventi restrittivi da parte della BNS, permettendo alla politica monetaria di sostenere la crescita senza rischiare un surriscaldamento dei prezzi. Tuttavia, gli esperti avvertono che un eventuale rialzo dei tassi negli USA potrebbe comunque trasmettersi, seppur in modo attenuato, ai mercati svizzeri, come osservato da Hilb.

Link to banks

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

What can Swiss residents actually do to take advantage of the current low interest rate situation? First of all, it is useful to compare mortgage loan offers: using the comparator of Comparis or similar instruments, you can check if your fixed or variable rate loan is still competitive compared to the average of 1.9% for 10-year mortgages.

Second, those with liquidity in bank accounts could consider shifting some of the capital to higher-yielding products, such as high-quality Swiss bonds or third-pillar pension funds, while still taking into account their own risk profile and tax implications.

Recommended Steps

1. Check the rate of your mortgage loan and compare it with the national average of 1.9%. 2. Review the condition of your deposit accounts and compare offers from different banks to possibly move funds to higher-yielding accounts or investment products. 3. Use the salary and tax calculator available on the site to understand how the net changes in case of changes to income or tax deductions, especially useful if you plan to renew a contract or ask for a raise.

To learn more, visit the calcolatore stipendio and learn how to optimize your income and expenses in a context of low interest rates.

Source: rsi.ch