For the second time in 2025, Swiss reference rates – used to set rents – have fallen. This means many tenants can expect to see their rents drop as well.
On September 1st, the Federal Housing Office (BWO) announced that “the reference interest rate valid for setting rents throughout Switzerland has fallen by 0.25 percent and now stands at 1.25 percent.”
Most rents in Switzerland are determined by the reference interest rate — an average of all interest paid on Swiss mortgages.
These, in turn, are based on the Swiss National Bank’s key interest rate, which now stands at 0 percent.
What does this mean for you (if you are a tenant)?
The lower rate goes into effect on Tuesday, September 2nd. This doesn’t, however mean, that rents will be lowered overnight; more likely, this will happen within the next few months.
“Tenants are generally entitled to demand a rent reduction of 2.91 percent if their rent is based on the [previous] reference interest rate of 1.5 percent,” the BWO said.
If, on the other hand, it is based on a rate higher than 1.5 percent, “the rent reduction will be higher.”
However, “if the reference rate determining the current rent is already 1.25 percent, the tenant does not have the option to demand an adjustment,” the BWO added.
In all, an estimated 2.2 million households, whose rents are determined by the reference rate, can apply for a rent reduction.
If yours is (this information is typically included in your lease), then you can fill out a sample form and send it to the landlord or management company.
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But don’t jump for joy yet…
As the BWO points out, a 2.91-percent cut is the best-case scenario — some tenants could see a lower reduction in their rents.
That’s because “other cost factors, such as the change in the consumer price index (inflation) can play a role in setting rents,” the BWO explained.
“Inflation can be taken into account up to 40 percent In addition, a change in maintenance and operating costs can lead to a rent adjustment. If applicable, this should be taken into account in the calculation.”
Last but not least, if your landlord’s costs, such as for property management, taxes, or insurance, go up, they can include these added costs in your rent, which means your actual reduction may not add up to 2.91 percent.
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Other things to keep in mind
These rules apply to existing leases.
But if you are looking to rent a new apartment, your rent is likely to be higher than previous tenants’.
That’s because when an old tenant moves out and a new one arrives, landlords have the right to increase the rent by up to 10 percent.
READ ALSO: Can you know how much your Swiss landlord charged previous tenants?
And then there is this…
While lower reference rates spell out good news for many tenants, the trend in the rental market is not positive.
In fact, in terms of costs, the already tight housing market in Switzerland is expected to worsen further:
READ ALSO: Swiss government forecasts higher rents in the coming years
