For several years now, mortgage rates have been lower and lower, reaching very low levels in recent months. Is a zero interest mortgage possible? Who would benefit from such low rates?
Since the 2000s, there is a clear trend towards lower mortgage interest rate. Thus, the average fixed interest rate for a 10 mortage waas around 5.5% in 2000. This year, the same rate is now below 2%. For shorter mortage duration, or for variable rate mortage, there are even lower rates!
This week, the average interest rate (all types of rates and duration) has been calculated at 1.73% only (Swiss Federal Office of Housing)! That is a new record. For example, a 500,000 CHF mortgage costs:
To be realist, a zero interest mortgage is an exception. However, it is possible to get a really low rate by taking advantage of the current rates which are especially advantageous now. In order to get such a low rate, the borrower can:
The risks of a really low interest rate are linked to changes in the marketplace. Thus, we can easily imagine a situation where a 2% mortage is manageable for an person’s budget. But what is this rate strongly increases once the contract is over? The risk is higher for short term mortgage, or variable rate mortgage. That means it is important to remain cautious when signing a mortgage. Better be sure to be able to pay the costs event with a rate increase.
Multicredit can help you to benefit from a lower mortgage rate. You will benefit from assistance for your mortgage request.