LUXEMBOURG – Fixed interest rates on mortgages are soaring. Explanations.
From 1.4% at the start of the year to 3% currently. It is no longer a bond, it is a flight. This, even if, “after a vertiginous rise from January to March, we have been in a period of stabilization since April”, corrects Yann Gadea, courtier at atHome.lu, speaking of fixed interest rates on mortgages.
The specialist that this push comes “from the market which undergoes a strong inflation, and to fight this inflation, the Central Banks raise their key rate”. A phenomenon also “increased by the war in Ukraine”.
This rate of 3%, the highest for five years, is it likely to discourage potential buyers? “Initially, no, the interest has not weakened, notes Yann Gadea, but since April, there is still a slowdown: people have slowed down their acquisition”.
“Stability should remain in order”
And faced with this surge in rates, the specialist recommends “opting for a combination of fixed and variable rates”, in order, he explains, to “limit the impact on his purchase plan”. Thus, a simple calculation carried out on the basis of a loan of 800,000 euros at a fixed rate over 30 years gave an additional cost of 564.42 euros per month depending on whether the interest rate in force fell from 1.4% to 2 , 8%.
Yuriko Backes, Minister of Finance, recalls that “it is not for him to comment on the pricing policy of banks”, while suggesting that there is “an interest subsidy” applied according to the level of income. and household composition.
For Yann Gadea, “stability should remain in place” over the coming months, to end the year around 3.5%, but without exceeding the 4% threshold”.