Swiss mortgage reference rate stays at historic low

Switzerland’s mortgage reference rate will remain at 1.25%, meaning the rent-related interest rate situation is unchanged for now, SRF reported, citing the Federal Housing Office.

The rate last fell from 1.50% to 1.25% in September 2025, after dropping from 1.75% to 1.50% in March that year.

Many tenants may still be able to request lower rents because numerous households have not yet claimed reductions linked to the two cuts, according to the Swiss Tenants’ Association. Each reduction of 0.25 percentage points generally creates an entitlement to a rent reduction of around 3%.

Tenants usually have to request the reduction from their landlord themselves. An analysis by Zürcher Kantonalbank found that only about 12% of tenants had requested the second reduction by April 2026.

The Swiss Tenants’ Association recommends checking individual claims using its rent calculator. It said about 75,000 rents had been assessed since the latest rate cut, with 67% producing an entitlement to a reduction.

The association said the average saving was around 65 francs per month when a reduction request succeeded. The actual reduction depends on the individual tenancy. Under certain conditions, landlords can oppose a request by citing higher costs or inflation.

Economists considered another cut in the reference rate, which would put further downward pressure on rents, highly unlikely. The average interest rate on all outstanding domestic mortgages would have to fall below 1.13% for that to happen.

Fredy Hasenmaile, chief economist at Raiffeisen, said such a decline would theoretically be possible at the earliest in mid-2030 if conditions remained unchanged. By then, however, the Swiss National Bank would likely have ended its zero-interest-rate policy and raised its key interest rates again.