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Best mortgage type

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BenutzernameMoneyland User Questions
Status Member
Registriert seit1/27/17
Beiträge2142

February 21, 2017, 4:30:54 PM

Which mortgage model is the best choice in Switzerland right now: Libor, fixed, variable, hybrid?

BenutzernameMoneyguru von moneyland.ch
OrtSchweiz
Status Expert
Registriert seit8/4/15
Beiträge4072

February 22, 2017, 4:08:53 PM

There is no single best mortgage type for all situations. Which type of mortgage would work best for you depends on your specific needs.

Currently, LIBOR-based mortgages have very low interest rates, but there is no guarantee that rates will remain low.

Locking in low rates for a certain period with a fixed mortgage can make sense if you are concerned about interest rates climbing in the near future.

Variable mortgages are primarily a stop-gap solution. Interest rates are high compared to fixed mortgages and (currently) LIBOR-based mortgages. The advantage of variable mortgages is that they can be terminated on relatively short notice.

More information:
LIBOR mortgages explained
Variable mortgages explained
Mortgages: Bank or insurance company
Mortgages: The cost of terminating a mortgage ahead of schedule
LIBOR swap mortgages: A closer look