Every three months the benchmark interest rate used to set Swiss rents is reviewed. If it goes down some renters can request a decrease in rent. This time it remained at 1.25%.
The last time it dropped was March 2020 when it fell from 1.5% to 1.25%, its lowest level since the measure began in 2008.
The rate is based on the average Swiss mortgage rate over three months. This rate is then rounded to the nearest 0.25%. On 30 September 2020 that rate was 1.3%, which rounds to 1.25%. The underlying mortgage rate has declined every quarter since 30 September 2008 when it was 3.45%.
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.
Rents are high in Switzerland. Data from 2019 shows average monthly rents of CHF 1,506 for an average 4-room apartment in Geneva – the newly listed price was CHF 1,860. A similar place in Zurich in 2019 cost CHF 2,000. Zurich and Geneva are consistently rated two of the worlds most expensive cities.
Current and historical reference interest rates are presented on the Office fédéral du logement (OFL) website.