Rents: rate down but the reduction is not automatic

Context

In brief

• In 2025, the key interest rate fell twice: to 1.5% (March) and 1.25% (September)
• Every drop of 0.25% results in about a 3% reduction on the rent
• Only 12% of tenants requested the second lowering (April 2026)
• Automatic adjustment works one-way: owners raise, rarely lower

Key Facts

• What: Rent reduction due to the fall in the reference mortgage rate
• When: March and September 2025
• Where: Throughout Switzerland (all regions)
• Who: Swiss Tenants' Association (ASI); data from Zürcher Kantonalbank (ZKB)
• Amount: Approx. 3% rent reduction for every 0.25% interest rate drop

In 2025, the reference mortgage rate fell twice, creating the conditions for rent reductions. However, the reality of Swiss tenants tells a different story: the majority have not yet submitted a formal request to the landlord. According to the Swiss Tenants' Association (ASI), it is time to remember a fundamental principle: the rent adjustment does not automatically take place downwards.

The rate used to calculate rents has remained stable at 1.25%, according to a statement from ASI today. But the road traveled so far has been anything but linear. In 2023, the rate had risen from 1.25% to 1.75%, generating price increases for millions of Swiss tenants. Then, in March 2025, the rate fell to 1.5%. Finally, last September it reached 1.25%, the pre-crisis level. Two cuts in one year: a real opportunity to obtain rent reductions.

The calculation mechanism

Any change of a quarter of a percentage point (0.25%) in the rate generally entitles you to a rent reduction of around 3%. This means that tenants should have benefited from two successive reductions: one at the time of the drop from 1.75% to 1.5%, another when the rate fell from 1.5% to 1.25%. In total, the overall drop of half a point (0.5%) is expected to correspond to a reduction of around 6% on the monthly rent.

But there is a problem. According to data from Zurich Kantonalbank, in April of this year, only 12% of tenants had formally requested the second reduction. This figure illustrates a huge gap between the reductions that should occur and those that are actually achieved. The ASI is clear: "The automatic adjustment works one-way." Landlords increase their rent when the rate rises, accelerating price increases. They rarely reduce it when the rate falls.

The reason for this is simple: there is no automatic mechanism that obliges landlords to pass on reductions to tenants. The Tenancy Act (Code of Obligations, Art. 253 et seq.) allows adjustments based on changes in the interest rate, but the procedure remains manual. The landlord must consciously decide to notify a reduction; the tenant, in the meantime, must be vigilant and actively request.

Operational details

Why the system favors owners

The asymmetry between price increases and reductions is not accidental. When the rate rises, the owner has an immediate economic incentive: passing on the increase to the tenant protects his margins. The owner's statement arrives on time. When the rate falls, the incentive disappears: reducing the rent means lower income, and the owner without regulatory constraints can simply ignore the situation.

The ASI notes that landlords, while not applying the rent reduction, often compensate with flat-rate increases on ancillary costs (heating, maintenance, insurance). The net result for the tenant is a minimal or non-existent reduction, despite the fact that the interest rate has fallen. In other cases, the landlord is simply late, waiting for the right time to negotiate other contractual conditions.

For this reason, the ASI reminds tenants that it is not enough to wait: they must act. The same association calls on landlords to proactively pass on the reductions without compensating them with flat-rate increases on ancillary costs. But, in practice, the association argues, tenants have no choice but to take action themselves.

The calculator as a tool for awareness

Recognizing this reality, the ASI has made available a free calcolatore online, available on the www.asi-infoalloggio.ch website, which allows you to check in a few clicks if you are entitled to a discount and to quantify it. The tool asks for a few data: the current rent, the rate at the time of signing the contract, the current rate, and the date of the last adjustment. In seconds, the calculator provides the exact amount of the reduction due.

ASI has also published a section with questions and answers, designed to guide those who face the problem for the first time. The regional sections of the association remain available for more in-depth advice. The invitation is clear and direct: do not wait for the owner to come forward, but check your contract immediately and possibly actively ask for a rent reduction.

This approach transforms the tenant from a taxable person into a conscious actor. Knowing the right and the exact number is not a luxury, but a necessity in a system where regulatory asymmetry in fact favors the inertia of the owners. The reference rate is recalculated every quarter on the average of the mortgage rates charged by the banks, which means that updates can occur at regular intervals and tenants should monitor their right periodically.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

How to request and obtain the reduction

The first step is always the contract. Check to see if it contains an adjustment clause based on the reference mortgage rate. Not all contracts include it; if there is not, a reduction becomes more difficult (but not impossible) to enforce. With the contract at hand, access the ASI calculator and collect the necessary data: the original monthly fee, the rate at the time of subscription, the current rate. The calculator will do the rest.

Once the amount due has been calculated, document the result. Screenshots, printouts, notes: everything that proves the right to the reduction. Then, contact the owner. The ASI recommends sending a written request — by registered email or simple letter — that clearly mentions the change in the reference rate (from 1.75% to 1.25%, passing through 1.5%), the amount of the calculated reduction (about 3% for every 0.25% decrease), the date from which the reduction must take effect, and the date by which the owner should respond.

If the landlord does not respond, or refuses, contact the regional branch of the ASI in your canton. The association offers free advice and, if necessary, support in conciliation procedures. Many cantons have a conciliation authority — a public office that attempts to resolve disputes between tenant and landlord before the case reaches the court. It is a quick procedure, often free of charge for the tenant, and resolves most cases.

Don't put it off: your rights

Remember that the right to a reduction is retroactive. If the rate fell as early as March 2025, and we are now in September 2026, you may be entitled to an 18-month reduction in arrears. It is an additional incentive not to postpone: each month of inaction corresponds to months of full rent that you should have paid less.

There is no legal deadline for requesting the reduction, but the principle is simple: the sooner you ask, the sooner you get. The landlord has no obligation to voluntarily inform the tenant of a reduction that is due. The Tenancy Act (Code of Obligations, Art. 253 et seq.) lays down the rules for adjustment, but does not oblige the landlord to take the initiative. It is the tenant who must supervise and request.

The ASI estimates that millions of francs remain in the pockets of landlords every year, while they should return to tenants in the form of reduced rents. This is not a matter of courtesy: it is a matter of rights enshrined in federal tenancy law. Using the ASI's calcolatore online is free, fast and anonymous. Asking the landlord only costs an email or a letter. Don't put it off any longer.

Source: tio.ch