Mortgage and consumer credit rates in Luxembourg dipped in September, following European Central Bank measures aimed at taming inflation.

Mortgage rates in Luxembourg saw a slight decline in September, offering incremental relief to borrowers. The Luxembourg Central Bank (BCL) released its latest figures on 29 October, revealing modest reductions in interest rates on newly negotiated loans.

In September, the variable rate on new mortgages averaged 4.45%, down from 5% in December 2023. Fixed-rate mortgages also saw a decrease, with new buyers negotiating an average rate of 3.47% for loans exceeding ten years. This marks a notable improvement compared to November 2023, when fixed-rate mortgages were around 4.16%.

Alongside a recent dip in property prices, these lower rates may bring slight relief to buyers facing diminished purchasing power.

Additionally, the average rate for consumer credit dropped to 4.84% in September.

Read also: Supporting first-time buyers: One-stop site for housing aid information goes live

These declines align with recent measures by the European Central Bank (ECB), which lowered its main interest rate to 3.25% in October as part of ongoing efforts to curb inflation.

“Have we defeated inflation? No! Are we in the process of doing so? Yes,” ECB President Christine Lagarde said at the time. In the medium term, many economists expect ECB rates to stabilise at approximately 2%.