Are you thinking about becoming a home owner during 2017? Your current mortgage contract ends this year and you have to renew it? What should be expected for 2017 regarding mortgage rate? Our analysis.
Since the 2000s, there is a global trend towards lower and lower mortgage rates. This is particularly true since 2008. Indeed, if we compare the rates for a fixed rate mortgage (over 10 years), there is a consequent decrease in the past few years:
(10-year fixed rate)
During the previous year, rates have reached an historically low level, as low as 1.42% for a 10-year fixed mortgage. For a 5-year fixed mortgage, this rate reached 1%. There was a light increase in the cost during the last quarter of the year, but it still remains low. In the end of 2016, the rate of a 10-year fixed mortgage was around 1.62%.
It is always a delicate task to predict precisely the development of interest rates for mortgage. Indeed, this development depends on many factors, both politic and economic. An upward trend has been found for the end of the previous year, since the US presidential election. In december 2016, the Federal Reserve also increased the level of key rates.
Regardless of this slight increase, most of the major players in the market agree on a slowdown in price rises. According to comparis.ch, the interest rate should stay at the same level during 2017.
Actual rates are low, and this is still an excellent time to take a mortgage, or renew an actual contract. If 2017 should be a relative stable year, economic and political conditions are more uncertain for the next coming years. If a decision must of course be based on everyone’s situation, it is good to consider a 5 or 10-year fixed rate mortgage.
If you need an offer for a new home or to renew a contract, it is always a good idea to ask a neutral broker. Indeed, a broker will be able to inform you and, most important, to compare offers and give you the best price on the market. There are many intermediates with a good reputation in Switzerland, for example: