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 July 2026. 

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 2 basis points on a monthly basis to reach 3.17% in July 2026 compared to 3.19% in June 2026 and the volume of these newly granted loans has increased by 44 million euros to reach 339 million euros in July compared to 295 million euros in June. On a yearly basis, the interest rate has increased by 4 basis points whereas the volume of newly granted loans has increased by 101 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 remained stable at 3.72% in July 2026 while the volume reached 23 million euros. The fixed interest rate with an initial fixation rate of over five years and up to ten years increased by 10 basis points compared to June 2026 to reach 3.90%. The corresponding monthly volumes increased by 14 million euros to reach 75 million euros.

Concerning real estate loans with an initial rate fixation period over 10 years, the monthly volumes increased by 19 million euros since June to reach 204 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 June:

• The interest rates with an interest rate fixation of over 10 years and up to 15 years increased by 5 basis points to reach 3.94%.
• The interest rates with an interest rate fixation of over 15 years and up to 20 years decreased by 17 basis points to reach 3.85%.
• The interest rates with an interest rate fixation of over 20 years and up to 25 years decreased by 33 basis points to reach 3.50%.
• The interest rates with an interest rate fixation of over 25 years and up to 30 years increased by 5 basis points to reach 3.91%.
• The interest rates with an interest rate fixation of over 30 years increased by 4 basis points to reach 4.05%.

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 increased by 4 basis points since June to reach 5.12% in July 2026. The volume of newly granted loans remained stable at 30 million euros in July. On a yearly basis, the interest rate has increased by 45 basis points whereas the volume of new lending has decreased by 3 million euros. 

The interest rate on households’ fixed-term deposits that have an initial maturity below or equal to 1 year has reached 181 basis points in July 2026 from 182 basis points in June 2026. On a yearly basis, this rate has increased by 22 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 5 basis points in July 2026 to 3.50%, compared to 3.55% in June, and the volume has increased by 5 million euros to reach 136 million euros in July from 131 million euros in June. On a yearly basis, this interest rate has decreased by 3 basis points and the volume of newly granted loans remained stable at 136 million euros. 

The variable interest rate on loans above 1 million euros granted to NFCs has decreased by 6 basis points on a monthly basis to 2.84% during the last reference period, compared to 2.90% in June. The volume of newly granted loans has increased by 116 million euros to reach 3 185 million euros in July compared to 3 069 million euros in June. On a yearly basis, this interest rate has increased by 30 basis points and the volume of newly granted loans has increased by 404 million euros. 

The interest rate on fixed-term deposits of NFCs with an initial maturity below or equal to 1 year has increased by 5 basis points on a monthly basis since June to reach 2.23% in July 2026. On a yearly basis, this interest rate has increased by 40 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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