Interest rates

The Banque centrale du Luxembourg (BCL) informs that, based on preliminary data, the main interest rates applied by Luxembourg’s credit institutions to euro area households and non-financial corporations (NFCs) for their loan and deposit operations have on average evolved as follows in August 2025.

Representative interest rates on new contracts[1] – loans and deposits – concluded with households

The variable[2] interest rate on mortgage loans granted to households has decreased by 14 basis points on a monthly basis to reach 2.99% in August 2025 compared to 3.13% in July 2025 and the volume of these newly granted loans has decreased by 40 million euros to reach 198 million euros in August compared to 238 million euros in July. On a yearly basis, the interest rate has decreased by 149 basis points whereas the volume of newly granted loans has increased by 41 million euros.

The fixed[3] interest rate on mortgage loans granted to households with an initial fixation rate of over one year and up to five years decreased by 3 basis points on a monthly basis to reach 3.24% in August 2025 while the volume reaches 20 million euros. The fixed interest rate with an initial fixation rate of over five years and up to ten years increased by 11 basis points compared to July 2025 to reach 3.59%. The corresponding monthly volumes decreased by 16 million euros to reach 31 million euros.

Concerning real estate loans with an initial rate fixation period over 10 years, the monthly volumes decreased by 68 million euros since July to reach 157 million euros. Interest rates of these loans are grouped by intervals of five years of initial rate fixation[4], and have changed as follows compared with July:

• Les taux avec une fixation initiale supérieure à 10 ans et inférieure ou égale à 15 ans ont progressé de 14 points de base pour s'établir à 3,83 %.
• Les taux avec une fixation initiale supérieure à 15 ans et inférieure ou égale à 20 ont diminué de 11 points de base pour s'établir à 3,27 %.
• Les taux avec une fixation initiale supérieure à 20 ans et inférieure ou égale à 25 ans ont progressé de 21 points de base pour s'établir à 3,50 %.
• Les taux avec une fixation initiale supérieure à 25 ans et inférieure ou égale à 30 ans ont diminué de 5 points de base pour s'établir à 3,53 %.
• Les taux avec une fixation initiale supérieure à 30 ans ont progressé de 20 points de base pour s'établir à 3,75 %.

It is important to mention that the indicated rates of the different interest rate fixations are average rates, where the calculations are based on a sample of banks and which are taking into account the volumes of granted loans.

The interest rate on consumer loans that have an initial fixation period above 1 year and below or equal to 5 years has remained stable since July at 4.67% in August 2025. The volume of newly granted loans has decreased by 9 million euros to reach 24 million euros in August compared to 33 million euros in July. On a yearly basis, the interest rate has decreased by 7 basis points whereas the volume of new lending has decreased by 7 million euros.

The interest rate on households’ fixed-term deposits that have an initial maturity below or equal to 1 year has reached 150 basis points in August 2025 from 159 basis points in July 2025. On a yearly basis, this rate has decreased by 166 basis points.

The following graphs provide a detailed overview of the evolution of interest rates and the volumes of the new business loans. Furthermore, the evolution of the interest rates over the past two years is presented in more detail.

Representative interest rates on new contracts1 – loans and deposits – concluded with non-financial corporations (NFCs)

The variable interest rate on loans below or equal to 1 million euros granted to NFCs decreased by 8 basis points in August 2025 to 3.45%, compared to 3.53% in July, and the volume has decreased by 35 million euros to reach 101 million euros in August from 136 million euros in July. On a yearly basis, this interest rate has decreased by 71 basis points and the volume of newly granted loans has increased by 13 million euros.

The variable interest rate on loans above 1 million euros granted to NFCs has decreased by 18 basis points on a monthly basis to 2.51% during the last reference period, compared to 2.69% in July. The volume of newly granted loans has decreased by 1 520 million euros to reach 1 596 million euros in August compared to 3 116 million euros in July. On a yearly basis, this interest rate has decreased by 112 basis points and the volume of newly granted loans has increased by 463 million euros.

The interest rate on fixed-term deposits of NFCs with an initial maturity below or equal to 1 year has decreased by 8 basis points on a monthly basis since July to reach 1.75% in August 2025. On a yearly basis, this interest rate has decreased by 157 basis points.

The tables pertaining to interest rates applied to credit institutions can be consulted and/or downloaded on the BCL’s website on the following link:

https://www.bcl.lu/en/statistics/series_statistiques_luxembourg/03_Capital_markets/index.html

 

Weighting method

The interest rates applied to new contracts are weighted within the categories of instruments concerned by the amounts of individual contracts. This results from the compilation of national aggregates carried out by reporting credit institutions and by the BCL.

 

[1] New contracts refer to any new agreement concluded between the household or the non-financial corporation and the reporting agent. New contracts include all financial contracts which mention for the first time the interest rate pertaining to the deposit or credit and all renegotiations of existing deposits or credits.

[2] Variable interest rate or rate with an initial fixation period inferior or equal to 1 year.

[3] Fixed interest rate weighted by the amounts of contracts for all mortgage loans granted, whatever the initial rate fixation period (above 1 year). This series has been published by the BCL since February 2009 only for methodological reasons linked to the identification of reporting agents.

[4] Following an update of the statistical data collection, since December 2022 the BCL has been collecting a breakdown of interest rates with an initial fixation rate of over 10 years in five-year intervals.

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