Switzerland lowers key interest rate to 0%: What it means for you

The Swiss National Bank (SNB) has lowered the key interest rate to 0%. Here’s what the change means for savers, homeowners and renters.

SNB cuts key interest rate to zero

The Swiss National Bank announced yesterday that it would cut the key interest rate by a further 25 basis points, bringing the rate to 0%. The new policy rate applies from Friday, June 20, 2025. 

In a press release, the SNB said the decision was designed to counteract the low inflation rate in Switzerland, support the economy, and counteract a further appreciation of the Swiss franc. Inflation continues to decrease quarter-on-quarter, from 0,3% in February to -0,1% in May. 

With the Swiss franc seeing strong growth over the past two years, this is the sixth time in a row that the SNB has cut the interest rate, which has fallen from 1,75% in February 2024 to 0% in June 2025.

How Switzerland’s 0% interest rate affects you

If you’re wondering what the fall in interest rates means for your savings, pension plan, or mortgage, we’ve put together this summary of the most important effects. 

Bank accounts & savings accounts

Regular current accounts in Switzerland haven’t earned interest for years, practically ever since the SNB first introduced negative interest rates in 2015. 

To earn interest on your money nowadays, you’d need to have it in a savings account. The interest rates on these accounts are closely aligned with the key interest rate, currently paying out an average of 0,15% interest on savings. 

Now that the key interest rate has dropped to zero, banks will not receive any interest on the money that they deposit with the National Bank. Above certain limits, the SNB will actually charge negative interest. Therefore, the interest rates that banks offer their customers will almost certainly fall. 

Expect your bank to contact you within the next couple of weeks about this. 

Mortgages

Interest rates on mortgages in Switzerland also track onto the SNB’s key interest rate - rising sharply in 2022, and now having fallen continuously since 2023. The average mortgage interest rate nowadays is currently just under 1,8%, according to the Berner Zeitung. 

Experts believe that the recent interest rate slash will probably make mortgages somewhat cheaper, but the effect will be limited because the zero-percent interest rate is already largely priced into the market - there’s not that much lower they can go. 

People with existing mortgages will feel the impact differently depending on which kind of mortgage they have. For example, SARON mortgages will benefit immediately because their interest rates are tied to the key interest rate. For other people on fixed-rate mortgages, nothing will change until the fixed term expires and they have to renew at a different interest rate. 

Mortgages becoming more affordable also stimulates activity on the housing market, so expect house prices to continue to rise. 

Rents

Rents in Switzerland are based on the so-called reference interest rate. This is an average of all interest rates paid on mortgages, which, again, are based on the SNB’s key interest rate. 

Whether or not the reference interest rate is adjusted, therefore, depends on the development of mortgage interest rates. This won’t happen immediately. The last time the reference interest rate was reduced was in March 2025, but experts aren’t ruling out another cut in 2025.