Reference interest rate remains at 1.5 per cent

Rents in Switzerland are defined based on the reference interest rate. What are the implications for your own home? Source:

The reference interest rate for mortgages remains at 1.5%. At, you can calculate the amount by which your rent should be reduced.

The situation remains unchanged in December 2019: the reference interest rate is still holding steady at a record low of 1.5%. 

The reference interest rate offers a point of reference for the calculation of rents: if it decreases, rents should go down, too. However, landlords are not obliged to reduce rents automatically when the reference interest rate goes down. It’s therefore up to tenants to take action themselves. You can calculate in advance what rent reduction you are entitled to.



Calculate rent reduction now

Rent reduction takes effect after the next termination date

If you didn't request a reduction in your rent the last time the rate went down, you should act now. You will find the interest rate currently applied in your tenancy agreement or most recent rental increase notice.

Note: any reduction in rent only takes effect after the next standard contract termination date. Therefore, you shouldn't wait too long.

Download sample letter here

The reference interest rate for mortgages has influenced rents since September 2008. Back then, it was 3.5% and has steadily decreased since. The latest data is published by the Federal Office for Housing once every quarter. 

What to do if the landlord refuses?

Landlords must respond within 30 days. They can deny the request based on factors such as inflation or higher operating expenses. Tenants should scrutinize the objections raised:

  • Landlords may charge a maximum of 0.5% of the net rent to cover increases in operating and maintenance costs. 
  • Inflation: by law, landlords may only pass on up to 40% of the inflation accumulated since the last rent adjustment to the tenant.

Note: not all tenants can benefit from the lower reference interest rate. Rental contracts with indexed or government subsidized rent (often with housing cooperatives) are not linked to the reference interest rate. Tenants with such a contract are not entitled to this kind of rent reduction.