Mortgages and real estate financing

Issuing mortgages is one of the Cantonal Banks’ core businesses.

Since 2008, rent pricing throughout Switzerland has been based on the new uniform mortgage reference rate. This is calculated by the Swiss National Bank and published each quarter by the Federal Housing Office.

The reference rate is based on the volume-weighted average interest rate of Swiss-franc-denominated domestic mortgage claims held by banks in Switzerland. This is published in multiples of a quarter of a percent.

Consequently, the reference rate is changed when the average interest rate for domestic mortgage claims changes by more than 0.25 percentage points compared with the last published average interest rate. When this happens, rents can be increased or reduced within the bounds of the currently applicable transfer rates.

In future, rents should be pegged to the Swiss national consumer price index rather than to mortgage rates.

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