Reference interest rate 1.25 percent, rent reduction in Switzerland, how to request it properly

The mortgage reference interest rate is an average of mortgage rates from all Swiss banks. It is published quarterly by the Federal Office for Housing (BWO) and serves as the basis for rent adjustments.

Since 2 December 2025, the reference interest rate has been 1.25 percent. This is the lowest level in years and means that many tenants may be entitled to a rent reduction, provided their rental contract is still based on a higher reference rate.

The reference rate replaced individual bank mortgage rates as the calculation basis in 2008. The idea was to create a uniform and transparent basis for all tenancies. The logic is simple: if the reference rate drops, landlords' financing costs decrease, and tenants should benefit.

Important: A reduction does not happen automatically. You must take action yourself.

You are generally entitled to a rent reduction if your current rent is based on a higher reference interest rate than the current 1.25 percent.

You are typically eligible if:

• Your rental contract or last rent increase was based on a reference rate of 1.50 percent or higher
• You have not received a rent reduction since the last drop in the reference rate
• You did not recently move into a unit where the rent was already calculated at 1.25 percent

You are typically not eligible if:

• Your rent is already based on the current reference rate of 1.25 percent
• You moved in recently and the rent was already adjusted accordingly
• The landlord can prove that inflation or cost increases offset the reduction

The exact amount of a potential reduction depends on several factors. For every 0.25 percentage point drop in the reference rate, a rent reduction of about 2.5 to 3 percent is generally assumed.

To check your eligibility, you need two documents: your rental contract and the last rent notice or rent increase, if there was one.

Quick Checklist:

1. Find your rental contract

Look for the original contract. It often states the reference rate that applied when the contract was signed.

1. Check the last rent notice

If you received a rent increase or decrease, it will state the reference rate that applied at that time.

1. Note the reference rate

Write down the value. If it is above 1.25 percent, you may be entitled to a review.

1. Note the date

Record the date of the last rent adjustment. You will need this for your request.

If you cannot find your documents, you can ask your landlord or property manager. You have the right to this information. Alternatively, check the historical reference rate table on the BWO website.

You submit the rent reduction request in writing, ideally by registered mail so you have proof of delivery. An email is not enough formally – the letter must be on paper and carry your handwritten signature.

The easiest path: our Word template

So you do not have to start from scratch, we have prepared the entire request as an editable Word document. Download it for free below, open it in Word, Pages, or Google Docs, replace the [square brackets] with your data, save as PDF, and send the letter by registered mail.

Inside the document you also get:

• A quick eligibility check with five questions to know if a request is worthwhile
• The full Swiss reference rate history since 2017 as a table to compare against
• A concrete calculation example (CHF 1,500 rent, 5.79 percent reduction, approx. CHF 1,042 annual savings)
• A mailing checklist with all seven mandatory steps
• A guide on what to do if the landlord refuses (conciliation authority, tenants' association)

Word workflow in 5 steps

1. Open the Word file (free via Office Online, Google Docs, or Pages)
2. Replace fields in [square brackets] with your data
3. Review the file, leave the signature line blank
4. File → Save As → PDF
5. Print the PDF, sign it, and send by registered mail

Short version for reference

If you want to see the structure first, here is the short version. The Word document is longer, properly references Art. 270a CO, and includes a paragraph requesting a written, transparent justification in case of refusal.

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Template Rent Reduction Request

[Your Name]

[Your Address]

[Postal Code City]

[Landlord / Property Management]

[Address]

[Postal Code City]

[City], [Date]

Subject: Rent reduction request pursuant to Art. 270a CO

Dear Sir or Madam

According to the last rent notice dated [Date], my current net rent is based on a reference interest rate of [X.XX] percent.

Since the mortgage reference interest rate has been 1.25 percent as of 2 December 2025, I hereby request, based on Art. 270a CO, a reduction of my net rent by [reduction in %] percent, effective from [next ordinary termination date].

Please confirm the adjustment in writing or provide a transparent written justification if you do not accept the request.

Yours sincerely

[Signature]

[Your Name]

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Important: send the letter by registered mail, keep the mailing receipt, file a copy for your records.

Step 1: Send the request

Send your letter by registered mail. Note the date and keep the receipt.

Step 2: Allow time

Do not set an explicit deadline, but expect a response within about 30 days. If none comes, proceed to step 3.

Step 3: Follow up

If there is no response after 4 weeks, send a short follow up:

"I am referring to my letter dated [Date] and kindly ask for a response to my rent reduction request. Please let me know if and when an adjustment will be made."

Step 4: Review the response

The landlord may accept, reject or partially accept the request. Ask for the reasoning in writing.

Step 5: Conciliation authority

If no agreement is reached, you can contact the local conciliation authority. The procedure is free and often resolved quickly.

Landlords may offer various reasons to reject or reduce a request. Here are the most common arguments and how to respond calmly.

Inflation adjustment

The landlord may offset part of the reduction with inflation. This is permitted under Swiss tenancy law. Ask for the exact calculation and check if it makes sense.

General cost increases

Rising maintenance or operating costs can also be claimed. Again, ask for the calculation.

Already low rent

If the landlord argues the rent is already below market level, that is not an automatic reason for rejection. The reference rate applies regardless of market value.

No response

If you receive no answer at all, that does not mean consent. Follow up in writing after 4 weeks and mention the option of contacting the conciliation authority.

Stay factual in your communication. The goal is a fair solution, not a conflict.

Aarau

Rental apartments in Aargau are often older buildings, which means many contracts are still based on older reference rates. This increases the likelihood that you are entitled to a reduction.

Wohlen

In smaller municipalities like Wohlen, property managers are often more directly accessible. This can speed up the process. Use the short communication lines and clarify questions by phone before sending your letter.

St. Gallen

The university city has many fixed term tenancies and shared apartments. If you live in a furnished room, check whether your rental contract even refers to the reference rate. With flat rate rents, this is not always the case.

At Bovita, rents are calculated transparently and you always know what your price is based on. No hidden adjustments, no surprises.