Save Money on Rent by Asking for a Reduction!

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How to save over 50 CHF per month on rent Logo

Sometimes, saving some money simply means asking for a reduction! I have asked for a reduction in my rent. And with this, I am going to save more than 50 CHF every month!

I just got confirmation from my building manager that they accepted the reduction of rent that I asked for. I am quite satisfied with the answer. However, they have been incredibly slow in answering me. They answered more than two months after my request… In Switzerland, most building managers are getting worse and worse.

With this reduction, my base rent goes from 1175 CHF to 1122 CHF. This will only start at the next term of my lease, on April 1st. But this means that next year, I will save 53 CHF * 9 = 477 CHF. And I will save even more the following year since all months will be lower :)

Switzerland reference interest rate

You may not know it, but in Switzerland, rent prices are indexed on a reference interest rate. When the interest rate goes down, you can ask for a reduction of your rent. Unfortunately, this is not an automatic process. You have to ask yourself to your house owner or building managers. On the other hand, you can be sure that if the interest rate rises, it will be an “automatic” process… I believe this should be automatic when the rate decreases since it is your right to get a reduction of price in that case. Switzerland is very good for the rich people. It makes it easier for them to stay richer ;)

Another thing that it important to know is that only the base rent is indexed on the reference interest rate. The charges for heating and water are not!

You can find the most recent reference interest rate on the admin.ch website (in French/German/Italian). The government is updating the rates every three months. I will be sure to let you know if the rate increase in the future. I will sure ask for a new reduction of rent if this happens :) And so should you!

If interest rate changes

Do not forget to check if the interest rate decreased since you signed your lease. If you have not asked for a reduction in many years, this could be a large reduction! Every year, the number of people who are paying too much is increasing. There are lots of models online for this, such as the calculator from ASLOCA or the one from Comparis.ch. You should really not hesitate to do this, it is in your rights. They cannot refuse to reduce the rent, it is in the law.

The only reason they would have to refuse would be if they make improvements to your apartment that would raise its value. And in that case, they have to justify the rise of rent of the apartment. A lot of home improvements are actually not justifying an increase in rent. Because in most of the cases, they are not improvement but renovation due to the age of the property. In that case, they normally cannot increase the rent. But they are trying every technique to increase it anyway. The sad point is that we are not well protected against that.

Some people are also afraid to get into trouble with the building manager or the owner if they ask with a reduction of rent. But a building manager cannot put you out just because you ask for a reduction of rent. This is something you are entitled to. There is no reason to give them more money than they should get.

Conclusion

Overall, I am quite happy, this is more than 50 CHF per month that I will save next year! The rent is often the biggest item in a budget. At least, it is the case in my budget. Therefore, it can be very interesting to reduce it. But, it is not always possible. If the reference index rate decreases, it is a nice opportunity to cut this large expense!

What about you? Did you already ask for a reduction of rent? Or do you have any other saving tip? Did you find a way to save on your rent?

About the author

Mr. The Poor Swiss

Mr. The Poor Swiss is the main author behind thepoorswiss.com. In 2017, he realized that he was spending more and more every year, falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2018, he saved more than 40% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

5 thoughts on “Save Money on Rent by Asking for a Reduction!”

  1. What’s Going down i’m new to this, I stumbled upon this I have discovered It absolutely useful and it has aided me out loads. I’m hoping to contribute & aid other customers like its aided me. Good job.

  2. Hello, I tried to find my current rent interest rate but it is not on the contract. I signed the contract in July 2017, do you know how can I check which interest rate is being applied?

    Thank you!

    1. Hello Josemi,

      Generally, it’s not in the contract, but in a special form that justify the change of rent price. If they didn’t change the rent when you moved in, you may not have this information. But normally, it should be present in your lease contract (“bail”). Make sure to double check. If it’s not, you have to ask either the owner or the building manager (“régie”) to give you the details on which conditions the rent was sent. Once you have this information, you can ask for a reduction if the rent was set when the reference was higher.

      I hope that helps

      Cheers

  3. Today, I just got my CHF 249.- monthly rent reduction confirmation, following advice from here !
    I had never asked in 9 years… 1.5% drop in interest rates !
    (But it’s still quite high, though…)

    1. Hi JB,

      Congratulations on getting that nice reduction! 249 CHF per month is a lot of savings!
      I hope you will find good use for the money :)
      Don’t hesitate to do it directly the next time the interest drop.

      Thanks for stopping by :)

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