Rent Reduction Possible – But Who Actually Claims It?
When the mortgage reference interest rate falls, many tenants in Switzerland can request a rent reduction – but in most cases nothing happens automatically.
Author: Nikita von Niederhäuser , UrbanHome property expert Updated on: · Reading time: approx. 8 minutes
What does a rent reduction mean in Switzerland?
A rent reduction generally means a decrease in the net rent.
The most important trigger is a lower mortgage reference interest rate. Under Swiss tenancy law, this reference rate is a key benchmark for rent adjustments during an ongoing tenancy.
A rent reduction generally affects the net rent, not automatically service charges, advance payments or separate fees.
Whether a tenant is entitled to a reduction depends on the reference interest rate underlying the current rent, any cost increases since the last adjustment and whether value-enhancing investments may be taken into account.
Net rent, service charges and advance payments are separate items. A claim based on a lower reference interest rate generally concerns the net rent.
Reference interest rate and entitlement: when can rent be reduced?
The current reference interest rate used in this article is 1.25%.
Many tenancy agreements were subject to rent increases in recent years as reference interest rates rose.
If the reference rate subsequently falls, tenants can check whether they are entitled to request a reduction.
For every 0.25 percentage point fall in the reference rate, the general starting point is a 2.91% reduction in net rent.
However, landlords may offset inflation, general cost increases or value-enhancing investments. The actual calculation should therefore always be checked.
A reduction in the reference rate does not automatically mean that the net rent falls by exactly 2.91%.
Why many tenants do not claim their rent reduction
Although an entitlement may exist, the rent remains unchanged for many households.
Often the reasons are not legal but rather lack of information, uncertainty or a wish to avoid conflict.
Lack of awareness
Many tenants do not know which reference rate their rent is based on, or that they must actively ask for a reduction.
Fear of paperwork
Calculations, deadlines and letters can seem complicated. Yet a clearly written request for a rent reduction is often enough as a first step.
Avoiding conflict
Some tenants do not want to strain their relationship with the landlord, so they forgo a possible reduction.
A request for a rent reduction is not a personal attack
In a tight housing market in particular, many tenants are reluctant to make demands.
A matter-of-fact request for a rent reduction is not an attack: it is a legally recognised way of having the rent reviewed.
Request a rent reduction or wait?
| Situation | Why request a reduction? | What should be checked? |
|---|---|---|
| The rent was increased because of the reference interest rate | A later fall in the reference rate may in principle create an entitlement to a reduction. | The last rent adjustment, reference rate at that time and calculation. |
| The tenancy agreement is based on a higher reference interest rate | The lower current rate may justify a reduction. | The reference rate stated in the tenancy agreement or earlier notices. |
| The landlord does not respond on their own initiative | Without a written request, the rent often remains unchanged. | Keep records of the letter, delivery and deadlines. |
| The landlord claims higher costs | Offsets are possible but must be plausible. | Check inflation, general cost increases, investments and the explanation given. |
| Tenants are afraid of conflict | A factual written request is provided for by law and is common practice. | Use a neutral tone, make a clear request and seek advice if unsure. |
Steps to obtaining a rent reduction
Check your tenancy agreement and last rent adjustment: which reference interest rate was used?
Compare the current reference interest rate with the rate underlying your rent.
Consider the net rent separately from service charges and advance payments.
Take possible offsets such as inflation, cost increases or investments into account.
Send the landlord a written request for a rent reduction.
Request the reduction for the next contractual termination date.
Await the reply and carefully check the reasons given.
If the request is rejected, only partly accepted or unanswered, contact the conciliation authority in good time.
Requesting a rent reduction due to the reference interest rate
The following text can be used as a starting point. Adapt the details to your tenancy agreement, address, reference interest rate and termination date.
Subject: Request for reduction of the net rent Dear Sir or Madam, I / We rent the apartment at the following address: [Address of the rental apartment] The mortgage reference interest rate has fallen since the rate relevant to my / our rent was determined. I / We therefore request a corresponding reduction in the net rent as of the next possible contractual termination date. Please inform me / us in writing within 30 days how you calculate the new net rent and from which date the reduction will apply. Kind regards, [Name] [Address] [Date]
Concrete real-life examples
Rent was increased in 2023
In 2023, a tenant received a rent increase because the reference interest rate had risen.
When the reference rate later fell again, she reviewed the previous increase and requested a reduction in net rent in writing.
The landlord may claim cost increases, but must justify them.
Tenancy agreement already based on 1.25%
A couple has lived in the same apartment since 2022 and has never received a rent increase due to the reference interest rate.
If the rent is already based on 1.25%, the current reference rate may not create any additional entitlement to a reduction.
However, a review may still be worthwhile if other factors are involved.
How to request a rent reduction correctly
Tenancy agreement checked
Last rent adjustment checked
Relevant reference interest rate identified
Previous calculation understood
Net rent considered separately
Service charges separated
Advance payments separated
Possible offsets noted
Request for reduction prepared
Neutral wording used
Delivery documented
Copy kept
Next termination date checked
Contractual deadlines reviewed
Response deadline monitored
Dates recorded
Calculation checked
Inflation checked
Cost increases checked
Investments checked
Explanation read
Deadlines checked
Conciliation authority identified
Professional advice planned if necessary
Related UrbanHome guides
Rents Are Rising – But Not Everywhere at the Same Pace
Housing Shortage Reaches Switzerland’s Middle Class
How Can I Find an Affordable Apartment?
What Are the Advantages and Disadvantages of a Rental Deposit?
Renting an Apartment: A Guide to Switzerland
Frequently Asked Questions About Rent Reductions in Switzerland
Detailed answers to the most important questions from this guide.
A rent reduction is possible in particular if the mortgage reference interest rate has fallen since the rent was last set or adjusted. The net rent and its underlying reference rate are decisive.
In practice, rent reductions usually do not happen automatically. Tenants should submit a written request to their landlord.
For a decrease of 0.25 percentage points in the reference interest rate, the basic reduction is generally 2.91% of the net rent. Inflation, general cost increases or investments may be offset.
Tenants should send the landlord a written request for a reduction of the net rent as of the next contractual termination date.
If the landlord refuses or fails to respond within the statutory period, tenants may apply to the relevant conciliation authority within the legal deadlines.
Many are unaware of their entitlement, fear paperwork or conflict, do not understand the calculation or do not know that a written request is needed.
No. A rent reduction generally concerns the net rent. Service charges, advance payments and heating expenses must be assessed separately.
The reduction is generally requested for the next contractual or statutory termination date. It is normally not granted retroactively as a matter of course.
Yes. The landlord may refuse or offer only a partial reduction, for example by claiming inflation, general cost increases or value-enhancing investments. The reasons should be checked.
A lawyer is generally not needed for the first written request. If calculations are complex, the request is refused or the situation is unclear, tenancy-law advice may help.
Index-linked, stepped or special tenancy agreements are partly subject to different rules. Review the agreement carefully before calculating a reduction.
Yes. Even small monthly sums add up over a year. A 2% reduction on a net rent of CHF 2,000 amounts to about CHF 480 annually.
Check your rent – and actively request a reduction if you are entitled
A rent reduction is possible in Switzerland if the reference interest rate has fallen below the rate underlying the current rent.
However, many tenants do not receive a reduction automatically and must request it in writing.
Checking the tenancy agreement, last adjustment, net rent and relevant deadlines can help avoid unnecessarily high housing costs.
Proceed objectively, check the landlord's calculation and contact the conciliation authority in good time if the request is refused.
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