Using B2B mortgage platforms, institutional investors can access mortgage loans without assuming traditional banking functions. This blog examines the market shifts, regulatory enablers and operating models shaping this transformation, and outlines how institutional investors can participate effectively.
 

General trends and developments in the credit and mortgage market

The lending market underwent a profound change in the past few years, driven by evolving economic cycles, shifting market dynamics and significant regulatory reforms. These forces impact not only borrowers but also lenders and investors, shaping how capital is allocated, and risks are managed across the financial system. Among the various lending segments, the mortgage market stands out as the most affected. Its size, long-term nature, and sensitivity to interest rate movements make it particularly exposed to both cyclical and structural shifts. In this context, interest rates have shown significant fluctuations, culminating in a return to a 0% rate in Switzerland as of July 2025 (see Figure 1), further amplifying the transformation momentum.

Mortgages are closely tied to the financial stability agenda of regulators. The final Basel III reforms and Swiss-specific adaptations that came into force in 2025 reflect heightened concerns around capital adequacy, liquidity buffers, and risk weighting for real estate exposures². FINMA highlights real estate-related risks in its financial stability assessments: in the Risk Monitor 2024³, it emphasised that vulnerabilities in the mortgage and real estate market remain elevated and are a key area of supervisory focus. This was reiterated in May 2025 when, in a dedicated guidance⁴, FINMA outlined for the first time with examples what it considers exemplary adequate risk criteria. This currently results in higher selectivity of banks when granting loans and hence also increased margins.

Despite tighter regulations, mortgage lending activity has continued to expand. After all, end customers of plain-vanilla real estate have still very favourable conditions in today’s low interest rate environment and increasing accessibility to compare offers. In Switzerland, banking mortgage lending volumes grew at an average annual rate of 3.0% over the past five years, but only 2.5% in the last two years. As of December 2024, total outstanding banking mortgage lending volumes in Switzerland reached CHF 1,217 bn (see Figure 2)⁵. In addition to banking mortgage volumes, insurance companies and pension funds account for an estimated 5.4% of the market (CHF 65 bn)⁶, bringing total 2024 volumes to CHF 1,282 bn when institutional investors are included.

Early 2025 data confirms continuing market momentum, with Q1 alone showing a 0.8% increase in banking mortgage volumes and pointing to an increasing annual growth of 3.2%, while the Swiss residential property index IMPI for the same period indicates a price growth slightly below with 3% (up from 2.4% in the previous year). This growth estimate is actually conservative, as policy rates only reached zero in July 2025, making further acceleration in the future very likely, consistent with the expansion observed during the negative interest rate period 2020-2022. Additionally, it can be expected that due to upcoming lower interest rates, customers will be again more price sensitive and willing to lock in favourable rates for longer maturity periods, especially in the case of the low-risk self-occupied real estate which has already been partially amortised.

Over recent years transformation has been defined mostly by strategic realignments, driven by events in the market, short-term optimisations resulting from pressure on margins, but also a ‘digital first’ ambition being increasingly applied to mortgage lending, as confirmed in our retail mortgage benchmarking study⁷, resulting in several trends:

As this transformation accelerates, structural shifts in funding sources are also under way, especially with interest rates having declined from recent highs. A lower interest rate environment traditionally prompts increased demand for mortgage refinancing and opens the door for new funding sources beyond banks such as institutional investors. Insurance companies, seeking stable, long-term assets that match their liability profiles, are well-positioned to refocus again on mortgage lending. Pension funds, with their long investment horizons, are similarly attracted to the predictable cash flows and returns of mortgage loans, aligning with their Asset-Liability-Management strategies. Asset managers are also exploring mortgage investments to diversify their fixed income portfolios and offer alternative investment products to clients. Even corporate treasury departments, although still a niche player, are considering the market selectively by financing employee home ownership schemes or managing excess liquidity.
 

Regulatory conditions and competitive levers for institutional mortgage investors

Switzerland’s regulatory landscape balances market innovation with financial stability, especially as institutional investors expand into mortgage lending. Insurance firms and pension funds operate under the Insurance Supervision Act (ISA) and the BVG occupational pension scheme, allowing them to finance mortgages selectively. Asset managers, regulated under the Collective Investment Schemes Act (CISA), can invest in mortgage assets as part of their institutional investments.

Strict safeguards are in place to protect borrowers and the broader financial system. Swiss pension funds for example may finance only owner-occupied residential properties, and pension assets cannot be used for holiday homes, second residences, or investment properties.⁹  For Swiss insurance companies, mortgages must be fully secured by first-ranking liens, loans must fit within the insurer’s tied assets portfolio and match long-term liabilities and, while not legally barred, most insurers avoid financing holiday homes or luxury properties, as these fall outside their low-risk investment strategy.¹⁰

At the same time there are selected key advantages for such institutional investors such as:

These structural characteristics enable institutional capital to offer attractive mortgage pricing while remaining within a prudentially sound framework. However, because institutional investors often do not maintain a client-facing retail infrastructure, operating their own origination channels and managing borrower relationships of a loan portfolio (including also workout of defaults), they depend on outsourced operating models to access the market. This is where B2B mortgage platforms can play a pivotal role, acting as the technological and operational bridge between capital providers and retail-facing originators. Reliance on platforms allows institutional investors to avoid the cost base associated with branches, compliance-heavy front-office staff, advisory teams, and IT systems tailored for client servicing — all of which erode banks’ margins — and to focus on standardised, plain-vanilla credit types without maintaining the full-spectrum lending expertise required by banks.
 

Mortgage lending platforms: The operating model enabling institutional investors access to credit

Mortgage lending platforms, especially B2B models, serve as the operating and technology backbone that can connect any capital provider with mortgage originators such as banks, brokers, or digital intermediaries. While their market share in Switzerland remains modest at only 5% of annual volumes¹¹, this contrasts sharply with significantly higher penetration in Germany (~45%), France and the Netherlands (~65%), and the United Kingdom (~75%), highlighting the substantial growth potential.

They play an essential role in enabling institutional investment by addressing three key limitations:

• Institutional investors fund selected loans based on an actively managed portfolio-level risk appetite.
• Originators maintain customer acquisition, advisory, cross-selling, onboarding, and compliance.
• Platforms coordinate the operational process, ensuring efficiency, transparency, and standardisation.

A notable strongly emerging example in Switzerland is Credit Exchange, a joint venture between Mobiliar, Vaudoise, PostFinance, Swisscom, Avera Bank, Glarus Cantonal Bank and Thurgauer Cantonal Bank. The platform connects institutional investors with financial intermediaries to fund mortgage and consumer loans, enabling capital deployment into fragmented markets without requiring retail distribution capabilities. In Germany, Hypoport’s GENOPACE platform performs a similar role within the cooperative bank network, standardising documentation, centralising clearing, and providing institutional investors with access to diversified mortgage flows without the need to manage borrower relationships or build retail infrastructure. Both platforms illustrate how technology-driven B2B models allow institutional capital to engage efficiently in mortgage markets at scale.
 

Key questions for mortgage institutional investors

Switzerland’s mortgage market is entering a new phase. A low-interest rate environment, combined with tighter bank regulation and advanced platform technology, is reopening the door for institutional investor capital to play a larger role again. With traditional safe assets like bonds offering limited returns, insurance companies, pension funds, and asset managers are increasingly seeking alternative sources of yield. Mortgage lending is becoming a relevant diversifier; however, success depends on their ability to respond strategically to changing market dynamics and to select the right operating models and partnerships. At the same time traditional players, mainly banks, need to expect increased competition in the upcoming low-interest rate years.

To navigate this opportunity, institutional investors must answer three core questions:

1. In what areas can we leverage structural advantages to offer attractive financing conditions and differentiate ourselves in the market?
2. What long-term investment goals do we aim to achieve through mortgage exposure — and how do they align with our broader capital allocation strategy?
3. Which platform partnerships and operating models will enable us to access scalable deal flow while maintaining control over risk, transparency, and regulatory compliance?

These decisions will shape how institutional investor capital supports both market innovation and financial stability in the years ahead.
 

Authors

• David Klidjian, Partner, Industry Solutions Banking
• Eric Gutzwiller, Director, Industry Solutions Banking
• Ueli Preisig, Director, Industry Solutions Investment Management
• Monica Bertolotto, Assistant Manager, Industry Solutions Banking