Forward Mortgage
Lock in interest rates early and reduce risks
The (also known as a fixed-term mortgage) is not a separate , but rather a strategy for locking in interest rates.
The fixed-rate mortgage allows you to lock in the interest rate for a future mortgage today. The goal: protection against rising mortgage rates.
A mortgage loan model describes the type of interest rate structure and term of a mortgage, such as Fixed-rate mortgage,SARON mortgage, or variable-rate mortgage. Transparent models make it easier to compare options and help you consciously manage interest rate risk and ensure planning certainty. Find more information here about mortgages with long terms: 10-year fixed-rate mortgage
Definition
Forward Mortgage
A forward mortgage is a that does not begin until a future date, but whose interest rate is fixed today.
Typical use cases:
- Buying a property in a few months
- Refinancing
You lock in the current interest rates—even if the Mortgage isn’t disbursed until later.
A fixed-rate mortgage is a mortgage with a fixed interest rate over an agreed-upon term. This means that the mortgage interest rate remains unchanged throughout the entire term, providing predictability regarding financing costs. Fixed-rate mortgages are among the most popular types of mortgages in Switzerland. Learn more here: Fixed-Rate Mortgages in Switzerland
Mortgage Extension
A mortgage extension occurs when an existing mortgage expires and a new one is taken out. Switching mortgage providers or comparing mortgage rates online can be particularly helpful during extension to secure lower mortgage rates.
Additional Information
How much does the insurance cost?
Lock-in rates are generally not free. For a forward mortgage, a so-called applies, the amount of which depends on the time until disbursement, the Term of the mortgage, and the .
As a general rule, the sooner the deal is closed, the higher the surcharge. This is usually factored directly into the Interest rate, but may also be listed separately.
There are also providers that do not charge a forward premium for terms extending relatively far into the future. At HYPOTHEKE.ch, the longest “forwards” are significantly longer than 12 months. The forwards are already factored into the .
Forward Surcharge on Mortgages
A forward surcharge is an additional fee added to the Mortgage interest when a Fixed-rate mortgage is taken out before its actual start date. Mortgage lenders lock in the interest rate for the future and charge a surcharge in return. The amount of the forward premium depends on the provider and the time remaining until the Mortgage begins. Taking out a Mortgage early can make sense if rising mortgage interest rates are expected or if you want planning certainty. The forward premium is related to the Mortgage yield curve. The steeper the current curve, the higher the premium.
Real-time mortgage rate comparison
A real-time mortgage rate comparison shows you the current mortgage rates available from various mortgage lenders based on your personal situation. Unlike general benchmark rates, this comparison takes into account factors such as Loan-to-value ratio, Affordability, property type, and region. This provides you with significantly more meaningful results and lets you see immediately which lender currently offers the best terms. A real-time interest rate comparison provides transparency, saves time, and helps you find the best Mortgage at the best Interest rate. At HYPOTHEKE.ch, you can enter your personal situation and then immediately see all possible Mortgages with interest rates ready for closing.
Visualization
Forward Mortgage in the event of a rise in interest rates
The graphic illustrates how a forward mortgage can help you lock in current interest rates and benefit from them in the event of a rate hike.
A Pipe Dream
How far in advance can you lock in interest rates?
Depending on the provider, interest rates can be locked in for up to 12 months in advance, and in some cases even up to 24 months.
As a general rule: The longer the term, the more expensive the protection becomes. However, depending on the current market conditions (yield curve), this may not necessarily be the case.
Our Top Interest Rates
Apply directly on our platform
Information on the best mortgage rates from HYPOTHEKE.ch
The interest rates on our Mortgage platform are updated hourly by our Mortgage lenders. The “starting at” rates / top rates displayed here are offered by at least one provider on HYPOTHEKE.ch. These represent the best possible Mortgage interest rates currently available. Individual rates ready for closing depend on various parameters such as Loan-to-value ratio, Affordability, property value, region, and other factors, and may differ from the rates displayed here.
Use Case
When Is a Forward Mortgage a Good Choice?
A forward mortgage is particularly worthwhile if you expect interest rates to rise, because:
- If interest rates rise sharply → You benefit with a forward Mortgage
- If they remain stable or fall → You pay more with a forward Mortgage
Important to understand
A forward mortgage is always a bet on interest rate trends and should be viewed primarily as a risk-reduction tool.
Pros and Cons
What You Need to Know
Benefits of a forward mortgage
Disadvantages of a forward mortgage
Special Case
Building or Buying a Property
Caution is advised for construction projects or when the timeline is uncertain, as construction delays can result in interest payments before the funds are actually needed—which can lead to additional costs.
It is therefore advisable not to lock in the entire amount as a forward contract and to consider flexible models instead.
How do I find the best Mortgage?
“A one-hour webinar packed with useful tips and information to help you choose the right Mortgage loan model and get the best interest rates.”
SPEAKER
Florian Schubiger
Founder of HYPOTHEKE.ch
What Many People Don't Know
Tax Treatment of the Forward Premium
Good news: The forward premium is tax-deductible in Switzerland:
- is considered part of mortgage interest
- reduces taxable income
- This rule applies until the imputed rental value is phased out (by 2028)
This is particularly relevant for high-income earners or those with large mortgage amounts.
Frequently Asked Questions
A forward mortgage is a fixed-rate mortgage in which you lock in the interest rate today, but the mortgage does not begin—or the funds are not disbursed—until a future date.
Yes, it’s generally more expensive because locking in the interest rate incurs costs. Whether it’s worth it depends on future interest rate trends. Depending on the shape of the , forwards are sometimes free for up to 6 months or, in extreme cases, even up to 12 months. Good to know: At HYPOTHEKE.ch, forward premiums are always already included in the displayed . This means we’re transparent and ensure the best possible comparability.
Real-time mortgage rate comparison
A real-time mortgage rate comparison shows you the current mortgage rates available from various mortgage lenders based on your personal situation. Unlike general benchmark rates, this comparison takes into account factors such as Loan-to-value ratio, Affordability, property type, and region. This provides you with significantly more meaningful results and lets you see immediately which lender currently offers the best terms. A real-time interest rate comparison provides transparency, saves time, and helps you find the best Mortgage at the best Interest rate. At HYPOTHEKE.ch, you can enter your personal situation and then immediately see all possible Mortgages with interest rates ready for closing.
A forward mortgage is particularly suitable for homeowners whose current Mortgage is about to expire, for buyers planning to purchase a home in the near future, and, in general, for risk-averse individuals.
Terms and conditions vary significantly among providers. Through a such as HYPOTHEKE.ch, you can transparently compare interest rates, including forward rates. The platform features providers that offer forward rates for up to 12 months at no cost.
An online mortgage platform allows you to calculate mortgage rates digitally, compare mortgages, and, depending on the provider, apply for one directly. The advantages include transparency, a wide selection of providers, and the ability to quickly compare mortgage rates. This transparency also helps ensure low interest rates. Would you like to get the best interest rates on your Mortgage? Use our tool: