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Fixed-rate loan With such a credit, the interest rate, and thus the monthly repayment, remain the same throughout the life of the credit. The counterpart of such stability is usually reflected by a rate slightly above the variable rate. Variable-rate loan In the case of the variable-rate loan, the interest rate of the credit fluctuates according to a reference index determined at the contract signature. In other words, monthly repayments will evolve based on interest rates up or down. With the variable rate, you do not know in advance the total cost (sum of interest) of your mortgage. Reviewable fixed-rate loan In this case, you start to repay your mortgage at a fixed rate and for a period of time agreed in advance (3, 5 or 10 years). At the end of the defined period, the interest rate is reviewed. It can be fixed again for a given period of time, or replaced by a variable rate.

Usually, the debt ratio of a household must not exceed 40% of the permanent income. Moreover, banks generally do not grant home credit if your monthly income is less than €1,200 if you are single or €2,000 if you are married.

Banks generally require a personal contribution corresponding to 20% of the acquisition price. However, this amount can be reduced according to your personal situation and the additional guarantees you are able to provide.

In addition to your monthly repayment, you will pay an acquisition and a mortgage fee. Count 6% of the purchase price of the property for the registration fee and 1% for the transcription fee (both corresponding to your acquisition fee). However, a tax credit of €20.000 € per person (€40.000 in case of joint declaration) is immediately deductible on registration and transcription fees. The tax credit can be used gradually, for other acquisitions, until it is fully consumed. In addition, you will pay for the bank fees and the notary fees that depend on your bank and your notary.

State aid from the Luxembourg Government are intended for people who are in the process of building, acquiring, transforming or improving their housing. Among this aid, the main ones are the construction or acquisition premiums, the savings premium as well as the state guarantee. It should be noted that in the example of the state, each municipality can also grant housing aid. These grants can be given to you according to your income and your family status.

The outstanding balance insurance is an insurance that covers the mortgage. It allows the reimbursement of the remaining payments, according to the percentage of capital insured, in the event of death and/or invalidity of the insured. If you are two borrowers, at least 100% of the capital should be split between the 2 co-borrowers. You may even choose to insure 100% for each borrower. Thus, in the event of the death of one of the two co-borrowers, the insurer reimburses the full credit to the bank and the remaining co-borrower therefore has nothing to pay and retains the property. It should be known that the outstanding balance insurance is not mandatory, although highly recommended. It can be paid in once or included in your monthly repayments. The price of the insurance depends on your age, your health condition and the type of property you wish to acquire. Finally, be aware that the insurance premiums paid are tax deductible under certain conditions.

atHomeFinance helps you to find the best home loan at a great rate. But that is not all! atHomeFinance can also guide you with your outstanding balance insurance and help you in re-negotiating your existing mortgage. A question or a specific need regarding home loan or related topic? Feel free to contact an expert!