Conditions for purchasing a home eased at the end of 2024 in Luxembourg, where the central bank recorded a decline in mortgage interest rates.

Good news for Luxembourg residents: the Central Bank of Luxembourg (BCL) has observed a significant drop in mortgage rates. According to the bank, the decrease is substantial for both variable and fixed-rate loans.

In December, new loans were negotiated at average fixed rate of 3.25% for ten years – conditions not seen in Luxembourg since autumn 2022. This sparked buyer interest, with Luxembourgish banks lending €338 million to home buyers, up from €219 million the previous month.

Variable rates, which are widespread in Luxembourg, also saw a sharp decline. In December 2024, the average variable rate for a new mortgage was 4.04%, the lowest since April 2023, when it stood at 4.11%.

Finally, consumer loan rates experienced a slight rebound, reaching 4.82% (compared to 4.77% in November 2024). However, past trends suggest that consumer loans tend to be more expensive in winter, leading up to the holiday season and the new year.

Read also – It's a good time to buy a home in Luxembourg, says ABBL CEO