by Every three months the Federal Housing Office (FHO) adjusts the reference rate used to set rents in many rental contracts. If it goes down some renters have the right to request a decrease in rent. This time it dropped 0.25% to 1.50%. Photo by Susanna Marsiglia on Pexels.comThe reference rate is based on average mortgage interest rates. At 31 December 2024, the average mortgage interest rate was 1.53%, down from 1.63% a quarter earlier. The reference rate rounds to the nearest quarter of a percent. Because 1.63% is closer to 1.75% than 1.5% the reference rate was 1.75% last quarter. Now, becuase 1.53% is closer to 1.5% than 1.75% the reference rate falls to 1.5%. The new rate came into effect on 4 March 2025. It will stay at this level until the average mortgage rate rises above
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Every three months the Federal Housing Office (FHO) adjusts the reference rate used to set rents in many rental contracts. If it goes down some renters have the right to request a decrease in rent. This time it dropped 0.25% to 1.50%.
The reference rate is based on average mortgage interest rates. At 31 December 2024, the average mortgage interest rate was 1.53%, down from 1.63% a quarter earlier. The reference rate rounds to the nearest quarter of a percent. Because 1.63% is closer to 1.75% than 1.5% the reference rate was 1.75% last quarter. Now, becuase 1.53% is closer to 1.5% than 1.75% the reference rate falls to 1.5%.
The new rate came into effect on 4 March 2025. It will stay at this level until the average mortgage rate rises above 1.62% or below 1.38%. The next reference rate will be announced on 2 June 2025.
If your rental contract links your rent to the reference rate then you can demand a decrease in rent when this reference rate declines. The Swiss Association of Tenants, Romande branch, provides useful information on when and how to go about making a demand. Their website (in French) can be found at www.asloca.ch.
When the reference rate declines those with such rental contracts should act smartly to ensure they get the maximum benefit. Landlords are typically quick to increase your rent when the reference rate moves upwards in their favour.
When the reference rate system was launched in 2008 the rate was 3.5%. Since then it has fallen as low as 1.25%, rising back up to as high as 1.75% before falling to 1.5% this week. Current and historical reference interest rates are presented on the FHO website.
More on this:
Swiss federal housing office report – (in French) – Take a 5 minute French test now
Your tenant and landlord rights (Le News)