Switzerland's lease drop is possible

If your rental contract links your rent to the reference rate, then you can ask for a discount when this reference rate falls.

Every three months, the Federal Service Office (FHO) regulates the reference rate used to place rents in many rent contracts. If it falls, some tenants have the right to ask for a discount. This time it dropped by 0.25% to 1.50%.

The reference rate is based on the average interest rates of mortgages. On December 31, 2024, the average interest rate of the mortgage was 1.5.3%, down from 6.3% a quarter ago. The reference rate is rounded in the nearest quarter of the percentage. Because 1.63% is closer to 1.7.5% than 1.5%, the reference rate was 1.7.5% last quarter. Now, because 1.53% is closer to 1.5% than 1.7.5%, the reference rate drops to 1.5%, albinfo.ch broadcasts.

The new rate went into effect on March 4th 2025. It will stay at this level until the average mortgage rate increases above 1.62%, or below 1.3.8%. The next reference rate will be announced on 2 June 2025.

If your rental contract links your rent to the reference rate, then you can ask for a discount when this reference rate falls. The Swiss Association of Carritors, the Romande branch, offers helpful information about when and how a request should be made. Their website (in French) can be found at www.asloca.ch.

When the reference rate falls, those with such rent contracts should act wisely to ensure the maximum benefit. Owners usually quickly increase your rent when the reference rate moves upward in their favour.

When the reference rate system was launched in 2008, the rate was 3.5%. Since then it has dropped by 1.25%, increasing again to 1.7.5% before falling to 1.5% this week. Current and historical reference interest rates have been presented on the FHO website.