When a fixed-rate mortgage expires or the framework agreement of a SARON mortgage ends, you need follow-on financing (Anschlussfinanzierung). Many homeowners then simply renew with their existing bank. That is convenient, but not always cheap. If you plan early, you can compare offers, meet deadlines and make a conscious decision about whether to lock in the interest rate in advance.
The right time to compare
Start comparing six to twelve months before your mortgage expires at the latest. There are several reasons for this lead time. Firstly, banks need time to review your documents, especially if your income situation or the value of the property has changed. Secondly, if you switch banks, you must observe the notice periods with your existing institution. Thirdly, starting early gives you room to negotiate: if you can present a specific competing offer, your existing bank will often offer you better terms.
If, on the other hand, you wait until a few weeks before expiry, often the only option left is to renew on the terms your existing bank offers you. Some banks also automatically convert a fixed-rate mortgage that has not been renewed into a variable mortgage, whose interest rate is usually well above market level.
The forward mortgage
With a forward mortgage (Forward-Hypothek), you fix the interest rate today for a fixed-rate mortgage that only starts later. A lead time of 12 to 24 months is common. For this protection, the bank charges a surcharge, known as the forward premium. The longer the lead time, the higher it is.
A forward mortgage is insurance against rising interest rates. If rates rise before your existing mortgage expires, you benefit from the lower rate already fixed. If rates stay the same or fall, you have paid the premium for nothing. Important: a forward mortgage is binding. Even if interest rates fall before it starts, the agreed rate applies.
Voltavia Capital’s current reference rates for a good credit rating and a loan-to-value ratio (Belehnung) of up to 65 % are 1.19 % for two years, 1.32 % for five years and 1.58 % for ten years (as at October 2026). The market average for five years is 1.71 %. A forward mortgage accordingly costs somewhat more than these rates.
Worked example
Your fixed-rate mortgage of CHF 700’000 expires in 18 months. For a new five-year fixed-rate mortgage, you could get 1.32 % today if the mortgage started immediately. For a forward mortgage with a lead time of 18 months, we assume a forward premium of 0.20 percentage points for this example, i.e. an interest rate of 1.52 %. The actual premium depends on the bank and market conditions.
| Scenario at expiry | Rate | Interest costs per year | Interest costs over 5 years |
|---|---|---|---|
| Forward mortgage | 1.52 % | CHF 10’640 | CHF 53’200 |
| Rates unchanged | 1.32 % | CHF 9’240 | CHF 46’200 |
| Rates have risen | 1.90 % | CHF 13’300 | CHF 66’500 |
If rates stay the same, the forward mortgage costs you CHF 1’400 more per year, CHF 7’000 over five years. If the five-year rate rises to 1.90 % by expiry, you save CHF 2’660 per year with the forward mortgage, CHF 13’300 over five years.
In this example, the forward mortgage is therefore only worthwhile if the five-year rate at expiry is above 1.52 %. Whether you want this protection is ultimately a question of your appetite for risk and your budget.
Notice periods and early repayment
With a fixed-rate mortgage, the expiry date is set out in the contract. Nevertheless, check whether your bank requires notification or notice before expiry so that the mortgage does not automatically roll over into another product.
With SARON mortgages, notice periods depend on the individual contract. Some framework agreements can be terminated at the end of an interest period, others only at the end of the agreed framework term. Read the provisions early so that you do not miss your desired switching date.
If you want to pay off a fixed-rate mortgage before it expires, for example to benefit from lower interest rates, the bank will usually charge an early repayment penalty (Vorfälligkeitsentschädigung). This compensates for the interest the bank loses as a result of the early repayment. In an environment of falling interest rates, it can be so high that an early switch does not pay off.
Switching to another bank
Switching banks on renewal involves some effort, but is entirely feasible. The new bank reassesses your affordability (Tragbarkeit) and the loan-to-value ratio, and the mortgage note (Schuldbrief) is transferred from the existing bank to the new one. Depending on the canton, small fees apply for this.
Bear in mind that the new bank calculates affordability according to the current rules. If your income has fallen since the purchase, for example due to retirement or part-time work, the assessment may be stricter than when you bought. A revaluation of the property can also change the loan-to-value ratio. Clarify these points early so that you can amortise or consider other solutions if necessary.
If your mortgage is split into several tranches with different terms, switching becomes more difficult, as all tranches are usually held with the same bank. In that case, it is worth deliberately aligning the expiry dates at the next renewal.
Checklist for follow-on financing
- 18 to 24 months before expiry: decide whether a forward mortgage is an option.
- 6 to 12 months before expiry: obtain and compare offers, prepare up-to-date documents.
- Check and observe the notice periods in your existing contract.
- Recalculate affordability with your current income.
- Align the term of the new mortgage with your life plans.
If you would like to know which terms are realistic for your follow-on financing, you can start with Voltavia Capital’s free affordability calculator. We would also be happy to discuss your situation in a personal consultation.