Mortgage rates for house purchases in January 2024 experienced a slight decline, with rates for up to one year of initial fixation decreasing by 9 basis points, while longer-term fixed mortgage rates, specifically for more than ten years of initial fixation, saw an 18bps drop. Rates for consumer loans were notably reduced by 82bps, reaching 4.72%, the lowest since May 2023, according to the latest data from the Luxembourg Central Bank (BCL). This data is based on preliminary figures from 73 banks in Luxembourg.

Specifically, the variable interest rate for mortgage loans to households with an initial fixation of one year fell by 9bps over the month, settling at 4.91%, compared to 5.00% in December 2023. Despite this decline, the volume of these loans saw a modest increase of €4m to €185m. On an annual basis, the loan volume decreased by €52m in this category, equating to a 22% decrease, indicating downward pressure in the housing loans market.

The fixed interest rate on mortgage loans to households, for initial fixations ranging from one to five years, saw a slight increase of 5bps month-on-month, settling at 4.24%. Meanwhile, the rates for initial fixations from five to ten years experienced an 18bps reduction, reaching 3.84% in January.

The total loan volume for house purchases in January 2024, including all maturities, was €430m, marking a 16% increase from December 2023, yet it remained 7% lower than the €460m recorded a year earlier.

Deposits

Deposits maintained their upward trend, with rates climbing to 3.46%, the highest since 2009. By the end of January 2024, total household deposits stood at €5.1bn, a 66% increase from €3.076bn at the end of January 2023.