Switzerland’s federal housing office (FHO) has cut the reference mortgage rate used to set rents, giving many tenants grounds to demand lower payments. From 2 September 2025 the rate falls by a quarter point to 1.25%, after holding steady in June. It had already dropped from 1.75% to 1.5% in March.
The benchmark, published quarterly in increments of 0.25 percentage points, is adjusted when the average mortgage rate across banks moves beyond defined thresholds. That figure now stands at 1.37%, down from 1.44% in June. Since its introduction in 2008 the rate has guided rent adjustments nationwide: a quarter-point rise lets landlords seek a 3% rent increase, while a cut entitles tenants to a 2.91% reduction. Changes usually take effect only after three months’ notice.
Tenant groups welcomed the move. Asloca, the tenants’ association, urged households to use its online calculator to check their eligibility and called the cut a modest relief amid what it decries as persistent “abusive” rents. Landlords’ organisations struck a different note. The Homeowners’ Association (HEV) reminded its members that the law limits rent reductions to cases of excessive returns—above 3.25% on equity, or 4.75% for new builds. Owners may also pass on 40% of inflation since the last rent change and can cite higher general costs, often applied as a flat 0.5% a year.
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