After two increases in a row the reference interest rate used for adjusting rents remains unchanged this quarter.
After two rises from 1.25% to 1.75% last year, many tenants in Switzerland will be breathing a sigh of relief. Many economists forecast no increases in the rate this year.
Every quarter the rate of interest used to set the rents in Switzerland is reviewed. If it goes down some renters have the right to request a decrease in rent. If it goes up landlords can generally raise rents.
The interest rate used to set the reference rate is the average rate on outstanding mortgage loans. This rate rose from 1.69% at 30 September 2023 to 1.72% on 31 December 2023. The average actual rate was then rounded to the nearest quarter of a percent, taking 1.72% to 1.75%.
The system of rent reference interest rates was introduced in 2008. Since then it has fallen from 3.5% to 1.25% before rising to 1.75%.
The next rental reference rate calculation is due on 1 June 2024 when it will likely remain at 1.75%.
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