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At the beginning of March, that time has come again: the Federal Housing Office (BWO) will announce the new status of the mortgage reference interest rate. Good news: UBS real estate experts don’t expect any further increases. Therefore, the reference interest rate will remain at 1.75 percent. For rental homes, this means you can breathe easy for now. An increase in the reference interest rate will cause the rent to increase.
BWO announced the last increase in the reference interest rate in December 2023; During that period, the rate increased from 1.50 percent to 1.75 percent. This gave landlords the power to increase rents based on a 1.50 per cent reference interest rate by around 3.2 per cent from April 2024, taking into account inflation and general cost increases. Currently, an increase of up to 10 percent in rent is possible for tenants whose reference interest rate is 1.25 percent.
Few homeowners were satisfied with the increase
What’s surprising is that rents have only increased by 16 percent since the first reference rate increase in June 2023, according to the study. One reason for this is that some landlords have not implemented the full range of benchmark interest rate reductions in the past. This meant they couldn’t raise the rent. “Others may have given up on it for now,” he continues.
The underlying average interest rate has risen slightly since December, the study’s authors write. However, growth has slowed significantly.
Saron mortgage will fall again soon
At the same time, as inflation rates are falling globally, significant interest rate cuts by central banks are looming, and this is already reflected in longer-term interest rates, which have been lower since last autumn. “We expect the Swiss National Bank (SNB) to reduce the interest rate by 25 basis points for the first time in June 2024,” the study authors write.
Provided local inflation does not rise unexpectedly, two further cuts of 25 basis points each are likely in September and December 2024. While interest rates on fixed-rate mortgages have already peaked, money market mortgages, also known as Sarong mortgages, are also expected to fall from mid-year. This is good news for homeowners.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
