Every three months the rate of interest used to set Swiss rents is reviewed. If it goes down some renters have the right to request a decrease in rent. Unlike on 2 June 2015, when it was reduced from 2.00% to 1.75%, giving many a chance to reduce their rent, on 2 March 2016, it was left at 1.75% despite mortgage rates continuing to fall.
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The interest rate used to set the reference rate was the average rate on Swiss mortgages at 31 December 2015. This rate was 1.76%, so the current reference rate of 1.75%, which is lower stands.
On 2 June 2015, the rental reference rate dropped to 1.75%, below the average mortgage rate of 1.86% at the time. This was due to a quirk in the system of rounding used to calculate the rental reference rate. The system rounds to the closest 0.25 of a percent. 1.86% is closer to 1.75% (0.11% away) than to 2.00% (0.14% away). The system can however swing the other way. From June 2014 until March 2015 the rental reference rate was higher than the average mortgage cost.
The next reference rate will be announced on 2 June 2016. For renters to see any further relief average mortgage rates will need to drop to 1.62%. To maintain the current rate of 1.75% mortgage rates will need to stay below 1.88%.
In general if your rental contract links your rent to mortgage interest rates then you can demand a decrease in rent when this reference rate declines. The Swiss Association of Tenants, Romande branch, provides useful information on when and how to go about making a demand. Their website (in French) can be found at www.asloca.ch.
When the reference rate declines those with such rental contracts should act smartly to ensure they get the maximum benefit as many landlords will not spontaneously offer the reduction and you can be fairly sure that landlords will be quick to increase your rent when the reference rate climbs.
Current and historical reference interest rates are presented on the Office Fédéral du Logement (OFL) website.
More on this:
Your tenant and landlord rights (Le News – May 2014)
1 June 2015 rental reference rate announcement (OFL website – June 2015 – in French)
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