The SARON is an overnight rate and applies to the interest period overnight.
So that you as a customer do not have to pay interest daily, interest settlement periods of three months are still offered. To determine the interest rate to be paid at the end of a billing period, SIX (the benchmark administrator) offers the compounded SARON reference interest rate. This is the result of the average of the daily compounded SARON rates for a period.
Specifically in relation to SARON mortgages, this means that the amount of the interest rate and thus the amount of the interest payment to be made is determined on the penultimate day of the interest period.
The calculation method of the Compounded SARON is available on the SIX website (Link ) can be viewed and recalculated at any time (Link ). To do this, select a start and end date.