SARON mortgages are currently around 0.8 percentage points below 10-year fixed-rate mortgages — for an CHF 800,000 mortgage, that means interest savings of CHF 6,400 per year. But SARON mortgages carry the full interest rate change risk, while fixed-rate mortgages guarantee planning certainty over the entire term. Which option is better for you depends on your risk tolerance, your investment horizon and the current market phase. This guide compares both options with current rates, advantages and disadvantages, as well as specific recommendations for different buyer groups.
SARON stands for Swiss Average Rate Overnight — the official Swiss reference interest rate. A SARON mortgage consists of the current SARON base rate (Compound Daily) plus a bank margin of 0.40-0.80%. The interest rate is recalculated quarterly. Currently (May 2026), a SARON mortgage stands at 0.65-1.10%, depending on loan-to-value and bank. It can be terminated at any time (with 3-6 months' notice), making it significantly more flexible than a fixed-rate mortgage.
With a fixed-rate mortgage, the interest rate is fixed in advance for the entire term (typically 2-15 years). This provides complete planning certainty — you know your monthly cost exactly. 5-year fixed-rate mortgages currently stand at 1.55%, 10-year terms at 1.65%. In return, you lose flexibility: early termination incurs an early repayment penalty, often several thousand francs.
When the yield curve is upward sloping (fixed-rate mortgage > SARON), when you have a short investment horizon (under 5 years), when you have additional liquidity to absorb interest rate rises, or when you are speculating on further rate cuts. Historically, SARON has been cheaper than fixed-rate mortgages in 80-90% of years — but the other 10-20% can become expensive.
If you rely on maximum planning certainty, have a long investment horizon (10+ years), or want to lock in a low rate at the turning point of the yield curve. Fixed-rate mortgages are particularly sensible for first-time buyers with a tight budget — an interest rate increase simulation provides reassurance. The additional 50-80 basis points should be understood as an insurance premium.
Many banks recommend splitting the mortgage into two or three tranches — e.g. 50% SARON + 50% 10-year fixed, or 30/35/35 across SARON, 5-year fixed and 10-year fixed. This spreads the interest rate change risk and reduces refinancing concentration. On renewal, you do not renew all tranches at the same time, which smooths your position.
In 2026, the yield curve is flat: SARON at 0.65-1.10%, 10-year fixed at 1.65%. The difference of 0.55-1.0 percentage points is historically small — SARON's interest advantage is lower than usual. Market observers expect stable rates in 2026; a 5-7-year fixed or a 50/50 blended solution secures low rates for the medium term without significant additional costs compared with SARON.