For those planning to buy property in Luxembourg, decisions between fixed and variable mortgage rates are crucial. Currently, variable rates are at their lowest, while fixed rates remain stagnant, according to the latest data from the Central Bank of Luxembourg regarding negotiations between local banks and individuals at the start of 2026.
In January, variable mortgage rates dropped to 3.01%, nearing their lowest point since last August when they peaked at 2.99% before rising in the autumn. This means that for a €700,000 loan over 25 years, monthly payments would be approximately €3,323.
Conversely, fixed mortgage rates continue their prolonged stagnation. They are consistently negotiated at an average of 3.77% for loans exceeding 10 years. For the same €700,000 over 25 years, this rate would result in monthly payments of around €3,607.
There is some good news regarding consumer loans, which are typically easier to negotiate. Luxembourg banks offered a rate of 4.27% for loans with a maximum term of five years in January, which is a decrease from the 4.55% observed in December 2025.
