Why Swiss rents keep rising despite lower mortgage rates

The Swiss rent index rose 32.1% from 2005 to 2025, as the country’s reference mortgage rate reached a historic low and now stands at 1.25%. The Swiss Tenants’ Association says many rents should have fallen under the legal link between rents and the reference rate. Instead, it says, rents have continued to climb.

The pressure reaches a large share of the population: two-thirds of Swiss households rent their homes, according to the association. On International Tenants’ Day, October 5, 2026, it called attention to the growing financial burden and urged policymakers to act. The association says low- and middle-income households bear the heaviest costs, while affordable housing is becoming scarcer. Its figures put the rise over two decades in sharp relief: the rent index moved upwards even as mortgage rates fell to very low levels. That gap is at the centre of its campaign for a change in housing policy.

A 1.25% reference rate has not translated into lower rents across the market. The rate is legally linked to rents, and the tenants’ association argues that many rents should have fallen as mortgage rates reached an all-time low. Its comparison of the rent index and mortgage rates points to a widening pressure on tenants: between 2005 and 2025, the index increased by 32.1%.

The association is pressing for the principle of “cost-based rent” to be applied. That would make rent-setting costs central to its proposed approach. Its criticism lands as housing costs consume a significant share of household budgets, particularly among people on lower incomes. The figures describe a mismatch between a very low reference rate and rising rents, while the association says affordable housing is increasingly hard to find. Its call for policy change focuses on rent-setting rules and the structure of the residential property market.

Rent takes 37.8% of gross income for people earning no more than CHF 4,000, the Swiss Tenants’ Association says. The pressure extends across borders: OECD data covering eight countries, including Switzerland, finds that one in two low-income renter households spends more than 40% of disposable income on rent.

Ownership of rental homes has also shifted. In 2000, private individuals owned 57.3% of rental accommodation; by 2024 their share had fallen to 43.2%. Investment companies moved in the opposite direction, increasing their share from 28.7% to 44.4%. The association says these companies have achieved high returns through the property sector. Together, the figures show the scale of tenant exposure and a change in who owns rental housing. The association identifies low- and middle-income households as those bearing the heaviest burden, as affordable homes become increasingly scarce.