As soon as the discussion about a mortgage starts, the first point is often the interest rate. This is an important point because it determines the cost of the loan. The interest rate can be fixed for the entire duration, fixed for a certain period and then revised, or variable. A fixed rate, which is often higher, offers security. A variable rate can cost you more in the event of a sharp rise, but it allows you to keep a great deal of flexibility on the repayment of your mortgage.
The rate you are offered depends on your profile and your project. A customer with a solid situation and a good contribution to his project will be perceived as more secure. The bank will be prepared to offer a more attractive rate.
The term of the loan has a very important impact on your borrowing capacity. It is also a good way to moderate your monthly payments. Depending on your situation and your project, the maximum repayment periods can vary greatly from one bank to another. A mortgage broker will be able to advise you about these questions.
Your loan insurance and interest are both deductible under certain conditions. In addition, home savings schemes in Luxembourg allow you to benefit from additional deductions and can be an interesting financing tool. Our mission is to guide you through the tax consequences associated with your financing.
Thinking about the future
One last point, which is often overlooked: you should think about the possibility of reselling your property before the end of the loan. A property is often just a stage in your life project. Making an early repayment potentially exposes you to additional costs that you should anticipate, particularly on a fixed-rate loan. The law caps these charges on a certain amount of your loan, up to €450,000. A mortgage broker will help you plan and organise your loan to avoid nasty surprises.