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.
