{"id":14180,"date":"2022-02-14T09:56:18","date_gmt":"2022-02-14T08:56:18","guid":{"rendered":"https:\/\/www.athome.lu\/blog\/?p=14180"},"modified":"2022-05-12T11:09:05","modified_gmt":"2022-05-12T09:09:05","slug":"making-a-real-estate-project-successful-against-a-lenvole-of-rates","status":"publish","type":"post","link":"https:\/\/www.athome.lu\/blog\/en\/marche-immobilier\/prix\/reussir-son-projet-immobilier-face-a-lenvolee-des-taux\/","title":{"rendered":"Making a success of your real estate project in the face of soaring interest rates"},"content":{"rendered":"

1.8%, 1.9% or even 2% on a 30 year fixed rate...<\/strong> Luxembourg borrowers are facing a surge in mortgage rates. But what impact will this have on your project? We explain and detail the measures taken by Luxembourg banks to maintain the feasibility of your project.<\/span><\/p>\n\n\n\n

Why are interest rates rising sharply in Europe and Luxembourg?<\/span><\/h2>\n\n\n\n

Inflation is the main culprit<\/strong> the rise in mortgage rates. Indeed, since December 2021, 10-year bond yields have risen by almost 0.4 points. This trend is the result of decisions taken by the US central bank (the FED) to control inflation.<\/span><\/p>\n\n\n\n

The latter provides for a wave of 3 increases in its key rate<\/strong>One of these has already taken place at the beginning of January. This decision is not without repercussions for individuals, including Europeans, who are already seeing an increase in their interest rates.<\/span><\/p>\n\n\n\n

Is my project still feasible?<\/span><\/h2>\n\n\n\n

If you carried out a borrowing capacity simulation a few months ago, this may no longer be valid<\/strong>. <\/span><\/p>\n\n\n\n

Indeed, after a year 2021 punctuated by new measures increasing the thresholds of contribution necessary to borrow, you risk being now faced with rising rates<\/strong>.<\/span><\/p>\n\n\n\n

Average borrowing rates have risen from 1.4% to 1.8% or even 2% (over 30 years, for a fixed rate).<\/span><\/strong><\/p>\n\n\n\n

The risk of this increase?<\/strong> That fewer Luxembourg residents will be able to access property.<\/span><\/p>\n\n\n\n

The consequence is to see monthly payments increase, which will limit borrowing capacity<\/strong>. For a 30-year fixed-rate loan of \u20ac800,000, you will have to pay an extra \u20ac155 each month to repay your loan.<\/strong><\/span><\/p>\n\n\n\n

Fortunately, there are still ways to get a home loan at an attractive rate:<\/span><\/strong><\/p>\n\n\n\n