Mortgage reference interest rates fall to 1,25 percent in Switzerland

The Federal Office for Housing in Switzerland has announced that mortgage reference interest rates have fallen from 1,5 percent to 1,25 percent, a reduction of 0,25 percent. This is good news for renters in Switzerland, who may be entitled to a reduction in rent.

Mortgage interest rates in Switzerland fall to 1,25 percent

The Federal Office for Housing (Bundesamt für Wohnungswesen) has released a statement announcing that mortgage interest rates in Switzerland have reduced from 1,5 percent to 1,25 percent. These rates, given by the Swiss government, impact rent prices across the country. 

The last published mortgage reference interest rate was 1,44 percent in June. This has fallen to 1,37 percent, and under tenancy law will be applied at 1,25 percent. The change will come into effect from September 2. 

Renters in Switzerland may see rent adjustments

Rental agreements in Switzerland are linked closely to the mortgage reference interest rate. Renters may be entitled to an almost 3 percent reduction in rent, depending on which interest rate is in their rental contract.

Tenants whose rental agreement is based on an interest rate of 1,5 percent should be able to apply for a reduction of 2,91 percent. However, if the rental agreement is linked to a rate of 1,25 percent, then there will be no change in rent price. Rental agreements usually contain information about which reference interest rate applies.

Rent reductions not guaranteed

There are some exemptions: “rental agreements with indexed or tiered rents, as well as turnover-based rents for commercial premises. Subsidised apartments are often also subject to special regulations,” writes the Federal Office for Housing.

If you think you are entitled to a reduction in rent, you can request this directly with your landlord. Read more about how to apply for a reduction here.

There are other factors which can also determine if rent prices are to change. Inflation, maintenance, utility, and operating costs are also taken into account when calculating rent changes. 

The next update on mortgage reference interest rates will be published on December 1 on the Federal Office for Housing's website.