Navigating the Complexities of the Changing Mortgage Market: The Impact of Rising Interest Rates

The mortgage market has undergone a significant shift due to rising interest rates. Previously, mortgages were a popular investment option for insurance companies and pension funds, but their appeal has waned as rates have increased. Many mortgage brokers have disappeared from the market, leaving customers with limited options when seeking financing.

In the summer of 2022, insurance companies and pension funds heavily invested in the Swiss mortgage market to escape negative interest rates. However, with the end of negative interest rates in September 2022, mortgages lost their appeal as an investment vehicle. This change has had far-reaching consequences in the market, with institutions like Zurich Insurance no longer offering new mortgages due to higher interest rates.

As a result of these changes, customers now have fewer options when seeking a mortgage. Traditional mortgage banks, cantonal banks, Raiffeisen, and regional banks are among the few institutions still active in offering mortgages. Customers must now negotiate and choose from a limited selection of offers to secure financing for their homes or businesses.

Mortgage brokers and platforms that were once thriving in times of low interest rates are now losing influence in the market. Customers who took out mortgages with low interest rates in the past may face challenges in refinancing due to a lack of options and support from brokers. The trend is shifting towards banks offering the best deals on loans and non-banks playing a lesser role in the market.

Despite these changes, many bank customers are reluctant to explore alternative lenders for better offers on their mortgages. Studies show that most customers are not proactive in seeking competitive mortgage rates and prefer to stick with their current lender even if it means paying higher interest rates.

Choosing which lender to choose for a mortgage is a critical financial decision that requires careful consideration and comparison of offers. As the market continues to evolve, customers will need to be more proactive in seeking out competitive mortgage rates to secure the best deal for their financial needs.

In conclusion, rising interest rates have drastically changed the landscape of the mortgage market by reducing its appeal as an investment option for insurance companies and pension funds and leading many brokers out of business. The path to securing financing has become more challenging for bank customers who must now negotiate with limited options available.

However, despite these challenges, choosing which lender to work with is critical when looking for financing options for primary residences or holiday homes. Bank customers need to be proactive in seeking out competitive mortgage rates while considering other factors such as fees, services offered by each lender before making any final decisions.