With the three recent interest rate decreases by the Swiss Central Bank, I was just wondering if anyone could predict approximately when the reference rental interest rate will correspondingly adjust (at three different dates, I suppose)? I know there is a time lag but am unsure about the details, and I found this UBS link (Current mortgage interest rates and interest rate trends | UBS Switzerland) but am wondering whether I am reading this correctly (in particular, should I be looking at the “Saron” forecast)?. Does anyone understand this fully and if yes, would venture to make a prediction?
To the SARON and swap rates you need to add bank margin which usually is 0.6 or 0.7%. So SARON currently is around 1.7% in total, possibly going to fall to 1.2% over the next year if the UBS forecast holds.
The reference rate is the average rate of all active Swiss mortages which includes floating but also fixed rates. Latest was 1.67% which is rounded to 1.75%. It came down from 1.72%, so trend is declining. If it reaches 1.62% it will be rounded down to 1.5% as the new reference rate. So it is not far away, but on the other hand SARON today is also not lower. So all in all, I think it might happen mid next year, but 1.5% will probably be the floor for now unless we go into recession.
1 Like
You can also see the history here:
As well as a link to the PDF at the bottom showing how some of the calculations are made (not that I ever tried to understand it):
See also this thread:
It went down again to 1.25%
I wonder if the landlord is entitled to increase the tiny bit again when calculating reduced rent, as it’s a second time in the same calendar year
The Homeowners’ Association (HEV) reminded its members that the law limits rent reductions to cases of excessive returns—above 3.25% on equity, or 4.75% for new builds. Owners may also pass on 40% of inflation since the last rent change and can cite higher general costs, often applied as a flat 0.5% a year.