There is no change in the reference interest rate at 1.75 percent – News

by time news
  • The mortgage ⁢reference ​interest rate is ⁤published by the Federal Housing Office.
  • The mark remains at the current ⁣level of 1.75 percent.
  • The​ reference⁢ interest rate has a direct impact on tenants.

Nothing is‍ moving for tenants in Switzerland⁤ at the moment. The Federal⁢ Housing Office (BWO) is leaving the reference mortgage ​interest rate⁣ at 1.75 percent,as it writes ‌in⁢ a statement. But it was‍ crystal clear.

Too determine the reference interest​ rate, ⁢the BWO relies on​ the average quarterly interest rate of Swiss⁢ banks’ domestic mortgage ​claims. According to BWO,‌ this fell to 1.63 percent, after 1.67 percent in the previous quarter.

To reduce, the⁣ average interest rate would have to fall to 1,625 percent. The reference interest rate is rounded up or down to the nearest quarter of a ⁢percent.‌ The experts were unable to decide in‍ advance whether‍ the reference interest rate would‍ fall in ​December.

It will​ work in march

But experts are convinced that it will⁣ definitely work in March with a lower reference‌ interest rate ⁤and apartment ⁢rents falling accordingly. the Swiss National Bank (SNB) has lowered key interest rates ⁢three times in a row, most recently in September. This ⁢has also‌ made the⁣ money⁢ market and fixed rate mortgages cheaper again.

Assessment by⁣ SRF business editor ⁢Jan Baumann: ⁤“The reference‌ interest ​rate remains where ‌it is, but only temporarily. This means⁤ that tenants can continue to expect rent reductions,provided a number of other conditions are met. So it is not postponed: It is almost certain that the⁣ reference interest rate in March will fall by ⁢a quarter of a percentage point to 1.5 from ⁤the ⁢current 1.75‌ percent.

The reason: Average interest rates in the mortgage loan market have ​been declining for some time. Or to‌ put it ⁢another way: It is cheaper to finance ‍houses and ​apartments with loans. Behind this ⁢is the National Bank’s interest rate policy. It has already⁤ cut its main interest rate three ⁣times in⁣ a⁤ row‍ this year.​ However, the mortgage loan market quickly responds to this.

This is good ‌news for‌ tenants. If the reference interest rate is reduced by 0.25 percentage points, landlords must reduce the ⁢rent by 2.9 percent – provided they ⁤have also implemented the previous increases. However, you ‌can offset 40⁣ percent ⁢of‍ accumulated inflation as well as⁤ “general cost ‌increases.”

Though, tenants ‌cannot expect the landlord to charge less rent if the ⁣reference interest rate falls. ​If he⁤ does not do this, a rent reduction must be applied for – otherwise ⁣the rent will remain the same.

⁢ ‍ ⁢ The first reference mortgage ‌interest rate will be published⁤ on 3 March 2025.
⁣ ​

Some ‌landlords have taken ⁢the increases‌ as an prospect⁢ to‍ raise rents significantly -⁣ in⁣ some cases by ⁢more then 10 per cent.

No further reduction instantly

After that, nothing will happen for a‌ long​ time. And this despite the fact that‌ many ⁣economists expect ‍that the National Bank will reduce the main interest rates⁢ further next week. The reason: the average interest rate, which forms ​the basis of the mortgage⁣ reference‌ interest rate, reacts only‌ slowly to⁣ changes in market interest ‌rates.

Many ‍fixed rate mortgages were taken ‍out which are ⁤used for the calculation during ​the negative interest rate phase. ⁣And ther ⁤was ​usually an ​extension ‌of time at a higher interest rate. This will prevent a sharper decline in the average interest rate.⁣

⁢ What economic factors should ⁤tenants consider regarding future changes in the mortgage reference interest rate?

Interview Transcript: Time.news Editor ⁣with Mortgage Expert Dr. Anna Müller

Time.news Editor: Good morning,⁣ Dr. Müller,⁢ and thank you for joining us⁤ today.With the recent announcement ⁣from the Federal Housing Office regarding the mortgage reference interest rate, many⁣ tenants in Switzerland are apprehensive about what this means for their housing costs. Can you unpack this for us?

Dr. Anna Müller: Good morning! Absolutely, I’d be happy to explain. ‌The Federal ‍Housing Office has decided to maintain⁤ the mortgage reference interest rate at ⁢1.75 percent, which has a significant​ effect on rental costs for tenants. Essentially, this rate serves as a⁢ benchmark for how ⁢much landlords can ask for in rent increases.

Time.news editor: So, if the‍ reference interest rate remains ⁣unchanged, what implications does that have for tenants?

Dr. Anna Müller: Keeping the rate at 1.75 percent means that there‍ won’t be an automatic increase in rental rates based ⁢on this benchmark. For‌ tenants,this stability is a relief,especially considering‍ that many are already struggling with‌ high ⁤living costs. However,‌ the average interest ⁢rate for Swiss banks’ domestic mortgage claims did​ decrease to 1.63 percent, ⁢which ⁣could raise questions about why the reference rate⁢ hasn’t been ‍adjusted downward.

Time.news Editor: That’s an interesting point. Can⁤ you explain how the⁢ Federal Housing Office determines this reference interest rate?

dr. Anna Müller: Yes, of course! The BWO calculates the reference mortgage ⁢interest rate based on the average quarterly interest rates of mortgage ⁤claims from various swiss banks. They⁤ look at the trends from the past quarter and make ⁢adjustments accordingly.if the average drops below a certain threshold—specifically 1.625 percent in this case—they would typically reduce the reference rate.

Time.news Editor: Given the decline in the average interest rate to 1.63⁣ percent, ‍do you think it’s likely ⁣we‍ could ⁣see a change in ‌December?

Dr. Anna Müller: It’s hard to predict. The ⁣experts⁢ remain divided on ‌whether the ⁢reference rate will drop next time it’s reassessed. As policies and market conditions can fluctuate, it’s possible that other economic factors could influence the decision. But for now, ‌tenants can breathe a little easier with the status quo continuing.

time.news Editor: You mentioned economic factors. What​ should ⁢tenants be watching for that might ‍affect future changes in the reference rate?

Dr. Anna Müller: Tenants should keep an eye ‌on overall economic trends, including inflation rates, ⁤housing ⁤supply and‌ demand, and any shifts in monetary policy. Changes in⁣ these areas can have ripple effects⁢ on interest rates and, ultimately, housing costs. It’s also beneficial for tenants to ‌be aware of how these​ factors​ might impact their own lease ‍agreements.

Time.news Editor: Thank you for those insights, Dr. Müller. It sounds like a lot of moving parts ‌are involved. Is‌ there anything else you would like​ to add for⁣ our readers?

Dr. Anna ⁤Müller: Just ⁣that it’s‍ crucial for tenants to remain informed and proactive when it comes to understanding their rental agreements and local ​housing market dynamics. Knowledge is power, ⁤especially⁣ in an habitat where economic conditions can change rapidly.

Time.news Editor: Excellent advice! Thank ‍you once again, dr. Müller, for your expertise and insights. We appreciate you taking the time to help clarify⁤ this crucial‍ issue⁤ for our readers.

Dr. Anna Müller: Thank you for having me! It’s been⁢ a pleasure.

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