Home Mortgages Mortgage Guide 1. The different types of mortgages

What are the different types of mortgages?

Discover the different types of mortgages in Switzerland, their advantages and disadvantages. Fixed rate, flexible rate and LIBOR – you will know all the differences!

In Switzerland there are different types of mortgages. It is not easy to find your way around, so here we would like to explain the three main types of mortgages:

1. The fixed rate mortgage
2. The mortgage with flexible interest rate
3. The LIBOR mortgage
However, there are other variants. Consult our guide for the complete list. The description of all types of mortgages.

However, let's deal primarily with the types of mortgages mentioned above:

The fixed rate mortgage

With this mortgage, one interest rate is fixed for the entire term of the mortgage. So during this period the interest rate remains unchanged. To learn more, it is best to visit our special page on the subject of fixed-rate mortgages.

The mortgage with flexible interest rate

This type of mortgage differs from the fixed rate mortgage by its great flexibility. The borrower is not tied to an interest rate in terms of time, but is subject to market fluctuations, which can be advantageous or disadvantageous for the borrower. Here is the link to our special page where you can learn more about the characteristics of the mortgages with flexible interest rate.

The LIBOR Mortgage

The LIBOR mortgage is the absolute reference for short term interest rates. The interbank rate on which it is based is set daily by the British Bankers Association. The duration of the contract is generally between 1 and 12 months. So it is the borrower who decides with what frequency the interest rate should be adjusted. Consult our special page dedicated to the LIBOR mortgage.

Advantages and disadvantages of the different types of mortgages

Fixed rateVariable rate / LIBOR Advantages- Easy budget management and security
– Protection against an increase in mortgage interest rates
– Benefit from the reduction of market interest rates
– Flexibility: change and repayment

Disadvantages- Blocked / No flexibility when the mortgage interest rate falls
– Termination often expensive
– Exposed to the risk of rising interest rates
– Not possible to budget the charges in the long term

Compare the interest rates on the list of interest rates now or request a free quote to get our individual expert advice.