Shifting Tides in the Mortgage Industry: Consequences of Negative Interest Rates on Bank Customers”.

Banks and insurance companies are struggling to find attractive investment options in the mortgage market, as negative interest rates have caused a shift in the landscape of the mortgage industry. Customers are experiencing far-reaching consequences, with limited financing options and higher costs for borrowers.

In 2022, many players and brokers in the mortgage business disappeared, leaving customers with fewer options to choose from. When negative interest rates ended in September, mortgages lost their appeal as an investment vehicle. Insurance companies like Zurich Insurance and pension funds stopped granting new mortgages, while banks reduced their activity in the market.

The shift has made it harder for customers to find competitive financing options, requiring them to negotiate with multiple banks before making a decision. Previously, customers had several offers from banks and insurance companies to choose from. However, now options are limited to mainly cantonal banks, Raiffeisen, and regional banks.

Mortgage brokers and platforms that thrived during times of low interest rates are losing influence in the market. Customers who secured mortgages with low interest rates may face challenges if their broker is no longer active. Refinancing extensions for these mortgages may not be competitive, leading to increased costs for borrowers.

Banks have taken the lead in offering the best mortgage deals; however, many customers are reluctant to explore the market for better options due to time-consuming processes and lack of expertise required for negotiations with banks. Traditional mortgage banks are preferred by families, while business customers tend to choose larger banks due to their expertise.

Choosing the right lender for a mortgage is a significant financial decision that requires careful consideration when it comes to holiday properties too. Local providers usually offer better interest rates compared to external banks in their home areas.

In conclusion, negative interest rates have led to changes in the mortgage industry’s investment landscape that have impacted bank customers negatively. As a result of this shift towards higher interest rates on mortgages, there is a need for more competition among lenders offering lower-cost financing options that meet customer needs effectively.