Mortgage reference interest rate stable at 1.75 per cent
The mortgage reference interest rate for tenancies in Switzerland remains at 1.75 per cent. This constancy influences the rent structure and offers stability for tenants and landlords.
The mortgage reference interest rate, which is decisive for setting rents throughout Switzerland, will remain at 1.75 per cent. This was announced on 3 June 2024 and is based on the volume-weighted average interest rate for domestic mortgage receivables, which stood at 1.72% on 31 March 2024. This average interest rate has not changed since the last quarter, meaning that the reference interest rate relevant under tenancy law remains at 1.75 per cent, rounded to the nearest thousandth of a percentage point. This stability will be maintained until there is a significant change in the average interest rate of below 1.63 per cent or above 1.87 per cent.
Significance for rent claims
The reference interest rate of 1.75 percent has remained unchanged since 2 December 2023. Tenancy agreements based on a higher reference interest rate of 2.00 per cent or more are still entitled to a rent reduction. Conversely, landlords are entitled to a rent increase if the underlying reference interest rate is 1.50 per cent or lower, in accordance with the provisions of tenancy law, which stipulate an increase of 3 per cent per quarter of a percentage point.
Exceptions and additional influencing factors
There are exceptions for certain rental agreements such as indexed or graduated rents and turnover rents for commercial premises. Subsidised flats are also often subject to special regulations. In addition, other cost factors such as the change in the national consumer price index and maintenance and operating costs can influence the rent structure. Inflation can account for 40 per cent of the rent calculation, which can lead to adjustments.
Regular publication and legal basis
The mortgage reference interest rate and the underlying average interest rate are published quarterly by the Federal Office for Housing (BWO), with the next publication on 2 September 2024. Since 10 September 2008, the uniform reference interest rate has served as the basis for setting rents in Switzerland, in accordance with Article 12a of the Ordinance on the Rent and Lease of Residential and Commercial Premises (VMWG). This regulation replaced the interest rates for variable mortgages previously applicable in the individual cantons and ensures a standardised and transparent rent calculation throughout the country.