The mortgage reference rate is going down by 0.25 percentage points. The new rate is 1.5 percent. The announcement was made by the Federal Office for Housing on Monday. The changes apply from Tuesday, March 4. The volume-weighted average mortgage interest rate, which the mortgage reference rate is based on, moved from 1.63 percent at the end of September 2024 to 1.53 percent at the end of December 2024.
The adjustment to the mortgage reference rate entitles many renters to a rent reduction.
Who can claim a rent reduction?
Whether or not you can claim a rent reduction from your landlord depends on which mortgage reference rate currently applies to your rental agreement. You can often find the applicable rate in your rental contract, or in the most recent communication from your landlord about the mortgage reference rate. For example, if your landlord has ever raised your rent based on a climb in the mortgage reference rate, the rate used for that rent hike should be shown on the notice that informed you about the rent increase.
If your current rent is based on the last mortgage reference rate (1.75 percent), then you can claim a rent reduction equal to 2.91 percent of your current rent. If your rent is based on an older reference rate of at least 2 percent, you can claim an even higher rent reduction. On the other hand, if the reference rate that your rent is based on is identical to the new rate, at 1.5 percent, then you cannot claim a reduction at all. There is also a chance that your rent is based on a past reference rate that is lower than the new rate (1.25 percent, for example). In that case, your landlord is entitled to raise your rent, but the new, lower reference rate would mean a lower rent increase than was previously possible.
The mortgage reference rate was last changed in December 2023, when it was raised to 1.75 percent. If, since then, your landlord has exercised their right to raise the rent based on the reference rate increase, you will now be able to exercise your right to claim a reduction.
Will my rent be lowered automatically?
No. Even if you should be paying less rent based on the lower reference rate, you still have to write to your landlord and request a rent reduction. There are some landlords that automatically adjust rents to match the reference rate, and send you the relevant documents.
Are there other factors that can influence my rent?
The mortgage reference rate is not the only factor that determines how much rent you pay. Inflation can also play a role, as can changes in running expenses. For these reasons, a drop in the mortgage reference rate does not necessarily result in a corresponding rent reduction.
How the mortgage reference rate works
Rents charged for rental housing are closely linked to the mortgage reference rate. You can find detailed information about how this relationship works in the guide to the Swiss mortgage reference rate.
More on this topic:
How the mortgage reference rate affects your rent
How high are rents in Switzerland?
How to lower your housing expenses
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