Discover how falling reference rates fueled a 7% surge in new mortgages in Switzerland in Q2 2025. Explore trends in owner-occupied and investment property mortgages, and what this means for Swiss real estate investors.
Swiss Mortgage Market Recovers in 2025 as Lower Interest Rates Drive Growth
In the second quarter of 2025, the Swiss mortgage market delivered strong signs of recovery, buoyed by a drop in the country’s reference interest rate. As Swiss banks adjusted their lending rates, both homebuyers and investors returned to the market, with new mortgage volumes and transaction numbers on the rise.
Lower Interest Rates Spark a 7% Surge in Mortgage Volumes
According to data from Resolve, a leading mortgage broker in French-speaking Switzerland, the total volume of new Swiss mortgages jumped by 7% quarter-on-quarter, surpassing 20 billion Swiss francs. The marked improvement in mortgage activity can be directly linked to reduced borrowing costs, reigniting demand in the country’s real estate sector.
Owner-Occupied Residential Real Estate: The Recovery’s Main Driver
Owner-occupied properties were at the heart of this resurgence:
- Over two-thirds of market growth came from owner-occupied homes.
- Both the number of transactions (+6%) and the average mortgage size grew significantly.
This uplift suggests not only renewed confidence among Swiss homebuyers, but also signals that residential property prices may be stabilizing and even recovering in some regions.
Investment Properties: Modest Growth, But Prices Remain Low
Investment property mortgages also showed signs of life, with the number of new loans increasing by 5%. Despite this uptick in loan volume, the market for Swiss investment properties faced continued headwinds:
- Transaction prices for investment properties remain subdued.
- The average mortgage size for Swiss investment properties is about 12% lower than last year.
- Demand for such assets appears to lag behind the owner-occupied sector.
These trends suggest that, while investors are slowly returning, many remain cautious amidst concerns about rental yields and further pricing corrections.
What’s Next for the Swiss Mortgage Market?
With lower interest rates expected to persist for the near term, industry experts anticipate continued stability and moderate growth, especially for owner-occupied real estate. Should demand for investment properties strengthen, Switzerland could see a broader rebound across its real estate market segments by late 2025.
Key Takeaways:
- Volume of new Swiss mortgages up 7% in Q2 2025.
- Owner-occupied residential homes drove two-thirds of market growth.
- Investment property loans increased by 5%, but transaction prices and average mortgage sizes remain lower versus last year.
- Lower reference rates are fuelling Swiss real estate recovery, particularly among homebuyers.
Ready to learn more about Switzerland’s mortgage trends and how lower interest rates can impact your property investment strategy? Stay informed with the latest Swiss mortgage market insights!
