Banks’ refinancing or fundraising costs are the costs incurred by banks due to their own borrowing. To be able to grant loans, banks often borrow money from the Swiss National Bank, for example.
The key interest rate thus has an impact on the conditions at which banks offer mortgage loans. A rise in key interest rates can increase borrowing costs and discourage potential property buyers from taking out a loan. In this situation, many opt for a smaller loan.
In concrete terms, this means that mortgage interest rates can also affect the real estate market, acting as a brake on price increases.