The monthly cost of personal home loans has shrunk slightly over the past year.
Variable mortgage interest rates were down from a national average of 1.51% in April to 1.49% at the end of May 2019, according to Luxembourg’s central bank, the BCL. The rate was 1.57% the year prior. The BCL said “the volume of these newly granted loans has increased by €15m to reach €259m”.
Fixed mortgage interest rates have “barely changed, standing at 1.71% in May 2019” although the rate was an average of 1.93% the previous year. “The volume of these newly granted loans has increased by €21m a monthly basis and has consequently amounted to €343m” in May 2019.
In recent months, both the IMF and OECD have warned that Luxembourg households and banks are heavily exposed to mortgage debt, which could create a liquidity crunch if the economy slows dramatically. Late last year, Moody’s said that debt was manageable.