Mortgage rates set to rise in Switzerland

Mortgage rates at each of Switzerland’s major banks are on the rise in Switzerland, despite the Swiss federal reserve not yet raising rates.

A person checks their finances on their phone and their computer
Mortgage costs are on the rise in Switzerland. Photo by Joshua Mayo on Unsplash

If you would like to purchase a property in the near future, you might want to think twice: Swiss banks are significantly increasing the interest rates for fixed-rate mortgages.

For instance, according to Switzerland’s Tages-Anzeiger newspaper, interest rates for a five-year mortgage at the Luzerner Kantonalbank rose by 0.19 percent to 1.4 percent; the seven-year fixed-rate mortgage at the same bank now costs 1.51 instead of 1.4 percent.

EXPLAINED: The hidden costs of owning a home in Switzerland

The trend is the same at other banks as well: Raiffeisenbank charges 1.84 percent for a fixed-rate, 10-year mortgage; Credit Suisse 1.77 percent, and Zürcher Kantonalbank 1.7 percent.

As a comparison, at the beginning of 2021, a 10-year mortgage cost 1.1 percent on average across the country.

Why are rates on the rise?

The increase is somewhat surprising considering that the Swiss National Bank has not yet decided to raise its rates, which are a usual precursor to the banks following suit.

Switzerland’s commercial banks however believe that rate rises are just around the corner, with Credit Suisse expecting the SNB to increase rates by 0.5 percent in total in two separate increases in the coming year.

EXPLAINED: Which banks are best for foreigners in Switzerland?

These changes look set to come about due to a gradual increase in inflation, as well as other national banks deciding to raise their rates.

Inflation is on the rise across the world due to increases in energy prices and supply problems as a result of the Covid pandemic.

The European Central Bank is expected to raise its rates in the coming year, as are several national counterparts.

READ MORE: How to protect your savings against inflation in Switzerland

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REVEALED: Which city has Switzerland’s cheapest beer?

Anyone looking for a cheap pint in Switzerland is likely to struggle no matter where they are, but there are still good deals to be had for a cold, frosty one.

REVEALED: Which city has Switzerland’s cheapest beer?

Some research carried out in Switzerland is more important to consumers than others.  

This one definitely fits under the ‘news you can use’ category.

A recent survey conducted by consumer website Hellosafe compared the price of a half a litre of beer in 29 cities in different cantons.

The prices come from 2022 and have incorporated recent spikes in cost for beer producers. 

READ MORE: Seven beers to try in Switzerland

Where is Switzerland’s cheapest beer? 

The study found that one of the cheapest pints, at 5.22 francs, can be had in Aarau, followed by Bern  (5.92).

While it is one of the world’s most expensive cities, a big mug of beer in Zurich costs “only”  6.96 francs, four cents less than in another relatively inexpensive location, the Valais capital of Sion.

Where is Switzerland’s most expensive pint of beer? 

Beer lovers in the west of Switzerland would be better off sticking to wine, with French-speaking Switzerland charging the most when it comes to beer anywhere in the country. 

The priciest half-litres are in Geneva (7.72 francs) and Lausanne (7.96).

Reader question: Can you drink in public in Switzerland?

Next on the list are Basel and Davos, which may appear to have very little in common with each other besides beer costing CHF7.03 per pint. 

What does the future hold? 

The study also looked ahead at how the war in Ukraine is likely to increase the cost of cereals used to manufacture beer, impacting the price of the end product.

Grain prices in Switzerland are expected to rise by 4 percent per tonne by the end of 2022, which will see price increases in several parts of the country. 

Accordingly, the price of a pint in Lausanne could increase by 32 cents and reach CHF 8.28. 

If Hellosafe’s estimates are correct, then the price of beer will increase the least in Olten, Langenthal, Chur and Arbon.

Beer in Switzerland

While Switzerland may be known internationally more for wine, beer has seen a strong surge in interest in recent years – particularly since the pandemic. 

Switzerland now boasts the highest density of breweries anywhere in Europe, with the Covid crisis a major factor in transforming the country into a beer hub. 

READ MORE: How the Covid crisis led to a boom in Swiss beer production

In 2020, 80 new breweries were established in Switzerland. 

Switzerland now has 1,212 breweries – which gives it a higher ratio of breweries to people than any of the other big brewing nations in Europe, including Germany, the Netherlands, the Czech Republic and Belgium. 

Just ten years ago, Switzerland had only 246 breweries, while in 1990 there were only 32 breweries in the entire country, the Neue Zürcher Zeitung reports.