The reference interest rate for residential rents has risen for the second time this year. The Federal Housing Office (BWO) is increasing the mortgage reference interest rate from 1.50% to 1.75%, according to a statement on Friday. Many rents are likely to rise again.
In determining the reference rate, the BWO relies on the quarterly average interest rate for domestic mortgage loans from Swiss banks. According to the BWO, this has risen from 1.59% in the previous quarter to 1.69%. This means that it is now back above the threshold for the next interest rate hike.
The main reason for the rise in rents is the mechanism of the mortgage reference interest rate. Because mortgage rates have fallen from their historic lows in the course of the interest rate turnaround, the reference interest rate has now also risen. And because this is rounded up or down to the nearest quarter of a per cent in the calculation, it has now risen to 1.75%. ...