Executive Summary

The mortgage reference rate in Switzerland remains unchanged at 1.25% as of December 2025, which does not trigger any immediate rent adjustments. However, for rental agreements that are still based on a higher reference rate of 1.5% or more, a reduction claim still exists. The underlying average interest rate has slightly decreased from 1.37% to 1.33%, which indicates a medium-term tendency toward further reductions if this trend continues.

Critical Guiding Questions

  1. To what extent are tenants actually taking advantage of the financial relief opportunity through existing reduction claims, and what obstacles exist in enforcing them?

  2. How does the long-term low interest rate environment change the balance of power between tenants and landlords in the Swiss housing market?

  3. What overall economic impacts does interest rate stability have on real estate investments and construction activity in an already tight housing market?

Scenario Analysis: Future Perspectives

Short-term (1 year):
The reference rate is likely to remain stable, with a slightly downward tendency. Tenants with older contracts can assert reduction claims, while landlords will try to cite other cost factors such as inflation to compensate.

Medium-term (5 years):
The prolonged low interest rate environment could lead to a further decrease in the reference rate, which would benefit tenants but simultaneously affect the return expectations of real estate investors and potentially dampen new construction activity.

Long-term (10-20 years):
A structural adjustment of the real estate market with changed valuation models for rental properties is likely. Transparency in rent pricing is expected to increase, while alternative housing concepts and financing models will gain importance.

Main Summary

Core Topic & Context

The mortgage reference rate remains unchanged at 1.25% and influences rent pricing throughout Switzerland as a central parameter. The stability of this rate is particularly relevant in a tight housing market with high demand.

Key Facts & Figures

  • Reference rate remains at 1.25% (unchanged since September 2025)
  • The underlying average interest rate has decreased from 1.37% to 1.33%
  • The reference rate only changes when the average interest rate falls below 1.13% or rises above 1.37%
  • The next announcement is scheduled for March 2, 2026
  • Rents still based on a reference rate of 1.5% or higher are eligible for reduction

Stakeholders & Affected Parties

  • Tenants can benefit from stable or decreasing rents
  • Landlords and property owners must calculate with constant or declining rental income
  • Mortgage banks operate in an environment of constant interest margins
  • The Federal Office of Housing (BWO) as the regulatory authority

Opportunities & Risks

  • Opportunities: Financial relief for tenants who assert reduction claims; planning security for all market participants
  • Risks: Possible neglect of investments in property maintenance due to declining returns; worsening of housing shortage due to reduced incentives for new construction

Relevance for Action

Tenants should check which reference rate their current rent is based on and assert reduction claims if applicable. Landlords should adapt their portfolio strategies to interest rate stability and include other factors such as inflation (40% applicable) and maintenance costs in their calculations.

References

Primary Source:
Press release of the Federal Office of Housing from December 1, 2025

Supplementary Sources:
Mortgage Reference Rate - Information Page

Verification Status: ✅ Facts based on the press release