The policy rate set by the Swiss National Bank has remained at zero percent since June 2025, but specialists anticipate that the rate will increase for the first time in over eighteen months. The mortgage reference rate has also stayed unchanged for more than a year, having dropped from 1.5 percent to 1.25 percent on September 1, 2025. Industry professionals examined how elevated inflation, higher mortgage costs, and a potential monetary policy tightening by the central bank could influence the benchmark metric.
Forecasters at UBS, Migros Bank, and Zürcher Kantonalbank share a consensus regarding the upcoming policy shift. They project that the central bank will implement 25 basis point increases in both March and June, bringing the policy rate to 0.5 percent by the second half of 2027. Looking further ahead within a one-year horizon, Zürcher Kantonalbank expects the rate to climb as high as 0.75 percent, citing climbing inflation expectations, a resilient domestic economy, and a widening interest rate and yield spread relative to foreign markets.
Regarding the impact on the mortgage reference rate, Zürcher Kantonalbank real estate specialist Jörn Schellenberg explained that the indicator depends directly on overall mortgage market movements. Because the benchmark encompasses the entire portfolio of Swiss mortgages, it typically reacts with a time lag to shifts in the broader rate environment. The average mortgage interest rate currently stands at 1.31 percent, with the rounding threshold projected to be crossed no earlier than the second quarter of the upcoming year, and any resulting adjustment to the reference rate taking effect during the following quarter.
Specialists project that the reference rate will climb from 1.25 percent to 1.5 percent during the second half of 2027. Robert Weinert, head of research at Wüest Partner, also anticipates this rise to 1.5 percent, provided that the central bank policy rate increases as expected. Beyond that milestone, the benchmark could experience further upward movement according to Santosh Brivio, lead economic research at Migros Bank, who cited expectations for two rate increases, moderately higher capital market yields, and an annual mortgage renewal rate of approximately 15 percent.
Migros Bank projects that a second upward adjustment in the reference rate would likely occur no earlier than the second half of 2028. Conversely, Zürcher Kantonalbank anticipates a move to 1.75 percent by mid-2028, after which the metric is expected to stabilize at that level. Fabian Waltert, an economist at UBS, similarly forecasts an increase to 1.5 percent in 2027 amid normalizing monetary policy, while noting potential for further climbs to between 1.75 percent and 2.00 percent in subsequent years under a scenario where the longer-term policy rate settles near 1 percent. Weinert projects a medium-term range of 1.25 percent to 1.75 percent, noting that the ultimate destination of the policy rate will depend on economic growth, inflation trends, and the central bank's policy responses.
Because the mortgage reference rate directly affects rental costs, any upward movement is passed directly onto tenants in the form of higher rents, whereas decreases allow tenants to demand reductions.
