Construction industry Whether now or in three months - the reference interest rate will fall

Tenants in Switzerland are facing rent reductions. However, it remains to be seen whether the decisive reference interest rate will fall this year. However, it will happen in March at the latest.

Next Monday, the Federal Housing Office (BWO) will communicate the mortgage reference interest rate. The Swiss National Bank (SNB) recently lowered key interest rates three times in a row, which also made money market and fixed-rate mortgages cheaper again.

In order for tenants to benefit from a reduction, the quarterly average interest rate would now have to fall to 1.62 percent, down from the most recently published 1.67 percent. Only then would the reference interest rate fall to 1.5 percent.

According to the calculations of UBS economist Fabian Waltert, it remains to be seen whether the latest decline will be sufficient to lower the reference interest rate as early as December. According to his model calculations, "this is like tossing a coin". According to Fredy Hasenmaile from Bank Raiffeisen, it is "literally a knife-edge decision".

But postponed is not canceled: both experts agree that the lowering of the reference interest rate will become a reality by March at the latest.

Demand it if necessary

This is good news for tenants. Because if the reference interest rate is reduced by 0.25 percentage points, landlords will have to reduce the rent by 2.9 percent - provided they have also implemented the previous increases. However, they are allowed to offset 40 percent of the accumulated inflation and "general cost increases".

However, tenants cannot expect the landlord to charge less rent of their own accord if the reference interest rate falls. If he does not do this, a rent reduction must be applied for - otherwise the rent will remain the same.

SDA