Let's Define the Chosen Term

A mortgage is a secured loan in which the borrower pledges the property as collateral for the loan. This provides the lender with a significant advantage, as it allows them to enforce the foreclosure and sale of the property in case of borrower default. As a result, mortgages are considered a secure investment option by institutional investors and banks in Switzerland, which explains their continuously growing popularity.

1. Security and Risk Mitigation: The property collateralization makes mortgages a relatively secure form of investment. In the event of default, the lender has the right to sell the property to recover the outstanding debt, minimizing the risk of loss and providing a level of security to the lender.
2. Long-Term Stability: Real estate is generally considered a stable asset over the long term. The demand for residential and commercial properties remains consistently high in Switzerland, supporting the property's value. This makes mortgages an appealing investment option for institutional investors seeking long-term and reliable returns.
3. Predictable Income: Regular mortgage payments from the borrower offer a dependable income stream for the lender. Clear payment terms and the borrower's commitment to making timely payments allow the lender to better plan and manage their income.
4. Portfolio Diversification: Mortgages can be a means for institutional investors to diversify their portfolio. By including real estate loans alongside other asset classes, overall risk can be reduced.
5. Attractive Yield: Mortgages typically offer attractive yields compared to conventional investments with lower interest rates. This makes them appealing to investors seeking higher returns.

The increasing popularity of mortgages as an investment option for institutional investors and banks in Switzerland reflects the combination of security, stability, and yield they provide. As a solid and property-backed investment, mortgages contribute to diversifying investors' portfolios and achieving attractive long-term returns.