Low inflation is easing the pressure on mortgage rates

An annual inflation rate of 0.5 per cent in June 2026 and an SNB key interest rate of 0 per cent will spare fixed-rate mortgages maturing by the end of the year the acute impact of rising interest rates. At present, the greatest influence often lies not with monetary policy, but with the banks’ offers and margins.

On 18 June 2026, the Swiss National Bank left its key interest rate at 0 per cent and expects annual average inflation of just 0.6 per cent for 2026 and 2027, and 0.7 per cent for 2028. As long as this forecast holds true, the strongest driver for a sharp rise in residential mortgage rates by the end of the year is absent.

At the same time, the recent upward pressure on prices shows just how limited the room for manoeuvre has become. Annual inflation in Switzerland stood at 0.5 per cent in June 2026. In May, it was 0.6 per cent. In June, the SNB also pointed out that inflation had risen from 0.1 per cent in February to 0.6 per cent in May since its last assessment, mainly due to higher energy prices.

Fixed-rate mortgages do not simply follow the SNB’
For homeowners with a fixed-rate mortgage due to expire, this is the crucial dividing line. Money market mortgages react directly to the key interest rate. Fixed-rate mortgages, on the other hand, are also linked to swap rates and thus to refinancing costs on the capital market. Even with a stable SNB, offers can therefore develop differently.

It is precisely this effect that is evident in the market. On 9 July 2026, Comparis reported that, despite lower capital market interest rates, benchmark rates for fixed-rate mortgages had fallen only slightly in the second quarter. The figures quoted were 1.77 per cent for ten years, 1.52 per cent for five years and 1.32 per cent for three years. According to the Mortgage Barometer, providers’ pricing margins remained high.

Competition trumps convenience
For homeowners with a mortgage due for renewal by the end of 2026, this means one thing above all else. The greater price difference is likely to lie between banks rather than between two SNB decisions. Anyone who simply renews with their usual bank may be missing out on the most effective way to reduce costs at this stage.

The SNB’s next scheduled monetary policy decision is due in September 2026. Until then, energy prices, geopolitical risks in the Middle East and international interest rate movements will remain sources of uncertainty. However, as long as Swiss inflation remains well below the SNB’s price stability threshold of 2 per cent, there is little to suggest a sharp rise in interest rates for fixed-rate mortgages due for renewal in the short term.