Are you planning a property project in the future, in the medium or long term? Opt for a home savings plan.

Intended for anyone whose objective is to buy a property, these savings aim to facilitate access to the priority by building up capital.

The purpose of a home savings contract is to allow a future buyer to benefit from a loan with advantageous conditions for the financing of his or her personal home. The contract must be taken out to finance the construction, l‘acquisition or the transformation of a flat or house for his or her main residence, including the price of the land.

Overall, a home savings contract is generally divided into two stages: a "savings" stage and a "loan" stage. During the savings phase, you save part of the sum required to finance a property project

The savings phase

First of all, you should know that home savings accounts are managed by home savings banks approved by the Luxembourg government (or paid to an approved savings bank in another EU country). If you take out a home loan contract at your bank, the bank will contact a partner savings bank. There are several of these in Luxembourg. You can also open a home savings account directly with an approved savings bank.

During the savings phase, you build up capital that will eventually allow you to borrow at a fixed, favourable rate for a property purchase. Once the contract is signed, the interest rate conditions for both the savings and the loan part are fixed once and for all.

These savings are therefore risk-free. It is a safe investment. Payments into your savings account will generate guaranteed interest that will gradually build up your savings.
The payments are free and can be adjusted. During the savings period you can also make additional payments at any time.

Contributions paid into a building society contract are, under certain conditions, tax-deductible.

These contributions, together with the interest income paid in, are deductible up to a maximum of 672 euros per year. This ceiling is increased by its own amount for the spouse (or partner) and for each child in the taxpayer's household. This means 672 euros per member of the household.

A home savings plan is taken out for a period of 10 years. After 10 years, the balance of the savings account may be used for purposes other than personal housing.

The credit phase

As its name suggests, the housing savings scheme provides access to financing for the purchase of a property (or for conversion work).

Thanks to the savings, a capital will have been built up over time, which will support your property project. These savings can be used as the basis for a global loan or combined with a mortgage.
More concretely, the housing savings scheme will allow you to borrow a sum identical to the capital saved. And above all, you will benefit from advantageous conditions, in particular a low and fixed interest rate for your loan.

The loan application is made to your bank advisor. Generally, financing is provided through a combination of a personal contribution, home savings and a mortgage. Depending on your situation and your real estate project, he or she will offer you the best financial package.

Another advantage of saving for a home is that, under certain conditions, you can benefit from state aid. More information: www.guichet.lu