Current interest rates in Luxembourg (2024)

You are looking fora mortgage in Luxembourg ? Wondering what rates are at the moment? Here are all the interest rate trends and developments.

What are the current interest rates in Luxembourg?

In recent months, fixed rates for 30-year mortgages have ranged from 4% to 4.5%. At the beginning of 2024, these rates began to fall, and are now between around 3.7-3.8% for a 30-year loan. Note that the final rate granted by the bank depends on several factors:

• The amount of the financial contribution (0%, 10%, 20%…)
• Buyer profile and reason for purchase (primary residence, investment)
• The energy class of the property to be financed (the more energy-efficient the class, the lower the rate, sometimes with differences of 0.4 points)
• Bank policy (some offer lower rates depending on the time of year or special offers)

To find out your real borrowing capacity, don't hesitate to carry out a personalised (and free) loan simulation at this page.

How to get a mortgage in Luxembourg with high interest rates?

Interest rates have not been this high for many years. This has a direct impact on buyers' borrowing capacity:

• In January 2022A couple earning €8,000 could on average borrow 887,000 € over 30 years (fixed rate)
• Visit 2024, this same couple can only borrow 668 000 € over 30 years.

Fortunately, there are solutions for buying in this context:

• First of all, don't hesitate to negotiate selling prices. They have fallen, especially on the advertisements, but not enough to match.
• Then opt for a hybrid mortgage, which allows you to renegotiate the rate after a few years. In this way, you can save money on the sale price, then save a second time by renegotiating your rate and lowering your monthly repayments later.
• Increasing your downpayment also reduces the cost of your loan (because you're borrowing less money). If you have a large down payment, you can also benefit from a lower interest rate.
• Finally, the best way is to go through a mortgage broker. It will be able to put several banks in competition and find you the best rate easily. With atHomeFinanceThis service is free of charge.

To find out how much you can borrow, do a loan simulation at this page.

Should you buy in Luxembourg or continue to rent?

The Luxembourg market has seen sharp price rises over the last ten years or so. Recently, however, it has been slowing down, with a few price drops appearing. This could be a good time to buy in Luxembourg for a number of reasons:

1. Many institutions, such as the OECD, are expecting a correction on property prices in european countries. This price drop could reach -10% to -15% depending on the country. Now is the time to grab a bargain.
2. The number of buyers in Luxembourg is falling. This means that there is less competition on each property: buyers can more easily negotiate their price and conditions.
3. Rent prices could rise in Luxembourg. As fewer people are able to buy a home, many are switching to renting. This tends to push up rental prices.
4. The mortgage brokers at atHomeFinance can offer you loans with renegotiable rates. So, as soon as rates fall, you can renegotiate your loan and reduce your monthly payments.

If you're planning to stay in Luxembourg for several years, it may be a good idea to buy: you'll be putting money aside that you can recoup when you sell your property. Even in a slightly falling market, it is often more attractive to buy than to pay rent.

However, if you are only coming to Luxembourg for a few months or a year, we would advise you to find rented accommodation.

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