The governor of the Central Bank of Luxembourg (BCL), Gaston Reinesch, already warned in July that interest rates will “most certainly” continue to rise. The evolution of interest rates granted by banks to households and non-financial companies (SNF) in August proves him right.
Variable interest rates for real-estate loans “progressed by two basis points to reach 1.36%" in August, compared to 1.34% in July, notes the BCL.
At the same time, the volume of credits approved to households in need of a loan drastically decreased from one month to the next (-€132 million). In August, credit institutions loaned €286, down from €418 million in July.
Fixe interest rates approved to households experienced a 25-point bump between July and August. On average, the fixed rate settled at 2.81% in August. In June, it was still at 2.26%.
The monthly volume of debt claims also decreased between July and August (-€122 million) to attain €218 million in August.
Looking at long-term periods, real-estate credits spanning over a period longer than ten years increased by 28 basis points to settle at 2.85% in August.
Less money is being borrowed here as well. The monthly volume of approved credits went down by €99 million in one month. It was €180 million in August. Year-on-year, “the rate has progressed by 148 basis points” and the amount of credits “has decreased by €156 million”, stresses the BCL.
The Bank further underlines that the rate for long-term loans, like those lasting for more than 30 years, “can be significantly higher than the stated average rate”. The interest rate on consumer loans with an initial rate fixation period of more than one year and shorter than or up to five years “increased by eleven basis points between July and August to reach 3.45% in August”.
