Prospective homebuyers in Luxembourg continue to face stubbornly high mortgage rates, with only modest declines and even increases since the start of the year.

On Friday, the Luxembourg Central Bank (BCL) released the latest mortgage rates – and the decline has been slower than many had hoped.

In May, the average rate for new variable-rate mortgages stood at 3.32%, down from 3.88% in January. While this marks a noticeable drop since the start of the year, the rates remain a hurdle for some buyers. For example, a €700,000 loan at 3.32% over 25 years would mean monthly payments of €3,437.

Fixed-rate mortgages, meanwhile, have seen a slight increase. The average rate for loans exceeding ten years rose to 3.52% in May. Over a 25-year term, this would translate to roughly €3,512 per month for the same €700,000 loan.

Notably, this is the first time since March 2023 that variable rates have dipped below fixed rates.

Beyond mortgages, consumer loan rates are also climbing, with the average rate for loans under five years reaching 4.81%.