Mortgage interest rates in Luxembourg
Every month we compile the rates obtained for our customers from our partners.
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Current mortgage rates
Latest rate data (July 2026)
| Type of loan | Interest rate |
|---|---|
| 1-3 Year Fixed Rate | 3.33% |
| 5 Year Fixed Rate | 3.48% |
| 10 Year Fixed Rate | 3.54% |
| 30 Year Fixed Rate | 3.80% |
| Variable rate | 2.9% |
What do you need to know regarding interest rate?
Mortgage interest rates are the percentage charged by lenders on the loan amount borrowed. They significantly impact your monthly payments and the total cost of your loan.
In Luxembourg, you can choose between fixed rate, which remain constant over the loan term or a predefined period, and variable rates, which fluctuate based on market conditions.
Fixed rates offer stability and predictability, while variable rates can provide greater repayment flexibility but carry the risk of higher payments if rates rise. Our experts can help you select the best option for your needs.
The latest news of the real estate market
The trend observed over the past few months has continued into mid-2026 and has been reinforced by the conflict involving Iran, resulting in a mixed environment depending on the type of interest rate.
On the one hand, long-term fixed interest rates remain volatile. This instability is mainly driven by ongoing geopolitical factors, including the wars in Ukraine and, more recently, the conflict in the Middle East (Iran–Israel), which have affected oil and gas prices and, consequently, inflation expectations. Since the 60-day ceasefire was announced, the situation has stabilized, with oil prices returning to their pre-conflict levels. However, it is essential that a lasting agreement is reached between the parties to prevent a resurgence of the conflict, which could once again drive up oil and gas prices.
On the other hand, variable interest rates have benefited from a more favorable environment in recent months. However, in June, the European Central Bank (ECB) decided to raise its key interest rates after several rate cuts in 2025. This decision was intended to curb inflationary pressures, but it was taken just one day before the ceasefire was announced, at a time of considerable uncertainty. Therefore, if a comprehensive agreement is reached and oil prices remain at their current levels, no further rate increases are expected.
In this uncertain environment, the choice between a fixed-rate and a variable-rate mortgage depends largely on your personal profile, your plans, and your tolerance for risk. By combining different financing solutions, we can tailor an offer that best meets your needs.
Yann GADEA
Head of Mortgage Brokers
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Which factors can influence your mortgage rate?
Factors that determine your mortgage rate
Your mortgage rate depends on several key factors. First, your financial profile is critical—lenders assess your credit score, income stability, employment history, and debt-to-income ratio to define the risk of lending to you. A strong profile often secures lower rates, while higher perceived risk can result in higher ones.
Second, market conditions play a significant role. Economic factors like inflation, central bank policies, and overall economic growth impact rates. For instance, strong economies often lead to higher rates, while slower growth or recessions tend to lower them to encourage borrowing.
Lastly, loan-specific details also influence your rate. The loan amount, repayment term, and whether you choose a fixed or variable rate all matter. Larger loans or longer terms may carry higher rates due to greater risk, while shorter terms or larger down payments could help you access more competitive offers.
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