Mortgage rates in Luxembourg have moved in opposite directions this summer, with variable rates dropping below 3% for the first time since 2022 while fixed rates have risen slightly, reflecting ongoing uncertainty in the housing market.

The Central Bank of Luxembourg published on Monday the most recent average rates for newly signed home loans, revealing a mixed picture.

Positively, variable mortgage rates have dropped below 3% for the first time since December 2022, settling at 2.99%. August therefore turned out to be a favourable month for borrowers. Under these conditions, a €700,000 loan over 25 years would mean monthly repayments of €3,316, while a €1.3 million loan – roughly the average price of a house in Luxembourg City – would require €6,258 per month, making such purchases nearly impossible without a significant down payment.

However, fixed rates have moved in the opposite direction. In August, the average fixed rate for new loans lasting more than ten years rose to 3.58%, an increase of 0.1 percentage point compared to July. For the past eighteen months, fixed rates have fluctuated between 3.4% and 3.62%. A €700,000 loan at 3.58% would mean a monthly payment of about €3,534, while borrowing €1.3 million at the same rate would result in a monthly payment of €6,564.

As for consumer credit, the rate has remained stable at 4.67% for loans with a duration of less than five years.