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How can households in Switzerland benefit from falling interest rates?

The Local Switzerland
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How can households in Switzerland benefit from falling interest rates?
A house may become more affordable in 2024. Photo: Pixabay

A lower inflation rate in Switzerland could lead to significantly reduce interest rates. But what would this mean for you?


After nearly two years of increasing prices for consumer goods and many services, the hope is for financial relief in 2024.

A lot depends on the inflation rate: will it continue to go up and make everything more expensive, or will the opposite — downward trend in costs and prices — finally prevail?

Here are some answers.

What is happening?

Compared to a nearly 3-percent inflation in Switzerland at the end of 2022, that rate fell to 1.4 percent in November this year, and is expected to remain well below 2 percent in 2024.

Also, economic forecasts call for Swiss National Bank’s current key rate of 1.75 percent to drop to 1 percent during 2024.

Will this lower rate signal positive news for Switzerland’s consumers?

If it evolves as economists expect, then yes.

This how your finances could benefit from lower rates.



Rents have risen in October and, with the recent increase of the benchmark interest rate this month, which is used to determine rents in Switzerland, many property owners will be able to up rents for their tenants by 3 percent next April again.

READ ALSO: Switzerland sees new rent hike but will yours go up? 

However, given the current interest rate forecasts (as mentioned above), no further rent increases will follow after that.

But since the benchmark interest rate reacts slowly to rate cuts, the relief will not be felt before 2025.



Swiss salaries are expected to go up by between 1.9 tand 2 percent on average next year.

Until now, rising prices absorbed any wage hikes.

If inflation / interest rate remains low, however, employees could see their real salaries — that is, money they receive after obligatory deductions —go up, even if slightly.
Mortgage interest rates

If you are hoping to become a property owner in the near future, the news is good.

That's because new mortgages, or refinancing of old ones, should become more advantageous due to aforementioned rate cuts.

As of December 4th, interest rates for a 10 -year fixed mortgage averaged 2.49 percent; 2.32 percent for five-year terms; and 2.4 percent  for two years.

Interest on Saron mortgages is expected to fall from 2.61 to less than 2 percent by the end of next year, as the benchmark interest rate will drop to 1 percent by then.

READ ALSO: What will happen to the Swiss economy in 2024?



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