The mortgage reference interest rate in Switzerland was lowered to 1.5 percent as of 3 March 2025. This adjustment will have a direct impact on rents in the country. Find out what rights and opportunities this gives tenants and how they can benefit from this change.
Background to the reduction in the reference interest rate
On 3 March 2025, the Federal Housing Office (BWO) announced that the mortgage reference interest rate would be lowered from 1.75% to 1.5%. This adjustment is based on the volume-weighted average interest rate for domestic mortgage receivables, which was 1.53% as at 31 December 2024.
Significance of the reference interest rate for tenancies
The mortgage reference interest rate serves as the basis for setting rents in Switzerland. Changes to this rate can lead to adjustments in rents. A reduction in the reference interest rate by 0.25 percentage points generally entitles tenants to a rent reduction of 2.91 per cent, provided the current rent is based on the previous rate of 1.75 per cent.
Requirements for a rent reduction claim
Tenants can apply for a rent reduction if their current rent is based on a higher reference interest rate than the current rate of 1.5 per cent. The exact amount of the claim depends on the reference interest rate specified in the rental agreement. For example, a reduction from 1.75 per cent to 1.5 per cent results in an entitlement to a reduction of 2.91 per cent.
Influence of other factors on the rent
In addition to the reference interest rate, other factors can influence the rent:
- Inflation: changes in the national consumer price index can be taken into account up to 40 per cent.
- General cost increases: Increased maintenance and operating costs can also be taken into account.
These factors can reduce the entitlement to a rent reduction.
Procedure for applying for a rent reduction
Tenants should follow the steps below to apply for a rent reduction:
- Check the current rent: Check which reference interest rate your rent is based on. You will find information on this in the rental agreement or in the last rent adjustment.
- Calculate the reduction claim: Determine the possible claim, taking into account inflation and general cost increases.
- Written request for a reduction: Submit a written request to the landlord requesting the rent reduction.
- Wait for the landlord’s response: The landlord has 30 days to respond to your request.
- In the event of rejection: contact the arbitration authority: If the application is rejected or there is no response, you can contact the conciliation authority.
Practical effects of the reduction
The reduction in the reference interest rate will lead to a reduction in rental costs for eligible tenants. This can lead to noticeable financial relief. However, it is important to check the individual rental agreement and carefully follow the steps mentioned in order to assert the claim.
Conclusion and outlook
The adjustment of the mortgage reference interest rate to 1.5 per cent offers many tenants the opportunity to reduce their rental costs. It is advisable to check your own rental agreement and, if you are entitled to a reduction, to apply for one. Future developments in the reference interest rate should continue to be monitored, as they can have a direct impact on the rent structure.
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