If you have financed the purchase of a property with a Libor mortgage, your bank will contact you to replace it by the end of this year 2021 because Libor will disappear.
The Libor rate is manipulated by the big banks and will change to a national interest rate called Saron (Swiss Average Rate Overnight). This rate is more stable. In Switzerland, nearly 200 billion mortgages are directly affected by the change from Libor to Saron.
What is the difference
The Saron rate is calculated retroactively and is only known at the end of an interest period. An individual surcharge will also be added, which is defined at the time the contract is concluded.
The customer bears the risk of interest rate changes when taking out a Saron mortgage. Several banks allow their customers to change mortgage models at the end of an interest period if the Saron interest rate is too high.
Saron is more stable than Libor and can no longer be manipulated.
What do you need to do ?
These changes only affect people who have taken out a Libor mortgage. It is possible to switch to a traditional model or to take out a Saron mortgage. Some banks have preferred an automatic conversion, while others have not granted mortgages with a term beyond the end of Libor.
Please contact your bank as soon as possible to find out more. Naturally, we will be happy to answer any further questions you may have.
Discover all our offers to rent or sell flats or chalets in Verbier. Besson Immobilier the reference agency in your mountain resort. Discover also our articles in our Besson Mag.
