Interest rates in Luxembourg (2024)

Wondering how much you can borrow in Luxembourg? Would you like to know what rates Luxembourg banks are currently offering?

Here's an overview of the offers you can find on the market.

Fixed rates in Luxembourg at the moment

In March 2024, the average fixed rates negotiated by atHome Finance with major Luxembourg banks were as follows:

• For a loan on 15 years: 3.7%
• For a loan on 20 years: 3.7%
• For a loan on 25 years: 3.8%
• For a loan on 30 years: 3.9%
• For a loan on 35 years: 4%

Under certain conditions, however, it is possible to obtain rates of below 3.5%.

• Some banks offer very aggressive deals, but these are limited in time. Check regularly with our brokers to see if an offer might be of interest to you. Make an appointment.
• Banks are also granting very attractive rates to solvent profiles (contribution and high income)
• Finally, if you are looking to finance a property with an A or B energy rating (purchase in VEFA or recent), the banks will give you a discount on the rates they usually charge.

In any case, it's important to know your borrowing capacity before you start looking in Luxembourg. You can estimate your borrowing capacity free of charge by using the atHomeFinance simulator.

Fixed rates, variable rates and variable rates: what should you choose?

There are several types of rate in Luxembourg:

• Fixed rates: the rate remains fixed for the entire term of the loan. It is possible to renegotiate this rate during the term of the loan, subject to certain conditions agreed with the bank. For example, you will have to pay penalties.
• Variable rates : the rate changes dynamically in line with market rates. This type of rate was particularly used in Luxembourg before the sharp rise in interest rates in 2022. Since then, it has become unattractive because it is higher than the fixed rate.
• Revisable rates: the rate is fixed for part of the loan (e.g. for 3 years). It is variable for the remainder. So when the variable rate comes to an end, you can renegotiate it and take out a more advantageous fixed rate (provided that rates have fallen in the meantime).

What is the best strategy for taking out a mortgage in Luxembourg?

Taking out a 30- or 35-year fixed-rate loan was a good idea when interest rates were low. But the tide turned in 2022, and the professional brokers at atHomeFinance now advise against this strategy.

According to the assumptions of central banks and major private banks, interest rates will fall again in the next 1 to 2 years, so we recommend a mix of variable and fixed rates. For example :

• Opt for a fixed rate that can be revised over a short term (3 years)
• Renegotiate your loan when rates fall, at the end of your review period
• Take a more advantageous fixed rate when they are lower

Note that this type of financial package must be tailor-made by a professional broker. Simulate your borrowing capacity then make an appointment with an atHomeFinance broker. The service is 100% free.

atHomeFinance's current advice for buyers

Here is Yann Gadéa's analysis and advice, Head of Mortgage Brokers atHome Finance, at the moment :