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Interest rates
18.12.2018
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 loans and deposit operations have on average evolved as follows in October 2018.
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 6 basis points compared to September 2018 to reach 1.47% during October 2018. The volume of these newly granted loans has remained broadly stable on a monthly basis to reach 248 million euros during the last reference period. On a yearly basis, the interest rate has decreased by 13 basis points whereas the volume of newly granted loans has increased by 58 million euros.
The fixed[3] interest rate on mortgage loans granted to households has decreased by 3 basis points on a monthly basis to reach 1.91% during October 2018. The volume of these newly granted loans has increased by 67 million euros on a monthly basis and has consequently amounted to 335 million euros during the last reference period. On a yearly basis, this interest rate has increased by 9 basis points and the volume of newly granted loans has increased by 72 million euros[4].
The interest rate on consumer loans that have an initial fixation period above 1 year and below or equal to 5 years has decreased by 9 basis points on a monthly basis to reach 2.23% in October 2018 whereas the volume of newly granted loans has increased by 9 million euros. On a yearly basis, the interest rate has decreased by 32 basis points whereas the volume of newly granted loans has increased by 7 million euros.
The interest rate on households’ fixed-term deposits that have an initial maturity below or equal to 1 year has decreased to 8 basis points during October 2018 from 55 basis points in September 2018. On a yearly basis, the return of such term deposits has remained unchanged.
Representative interest rates on new contracts1 – loans and deposits – concluded with NFCs
The variable2 interest rate on loans below or equal to 1 million euros granted to NFCs has increased by 9 basis points on a monthly basis to reach 1.65% in October 2018. The volume of newly granted loans has decreased by 90 million euros on a monthly basis, reaching 837 million euros in October 2018. On a yearly basis, this interest rate has decreased by 12 basis points whereas the volume of newly granted loans has remained unchanged.
The variable2 interest rate on loans above 1 million euros granted to NFCs has increased by 13 basis points compared to the previous month to reach 1.23% in October 2018. The volume of these newly granted loans has decreased by 902 million euros on a monthly basis and has consequently reached 4 596 million euros in October 2018. On a yearly basis, this interest rate has remained unchanged whereas the volume of newly granted loans has decreased by 569 million euros.
The interest rate on fixed-term deposits of NFCs with an initial maturity below or equal to 1 year has reached -17 basis points during the last reference period.
The tables pertaining to interest rates applied to credit institutions can be consulted and/or downloaded on the BCL’s website on the following pages:
http://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] It is worth stressing that new lending volumes for housing loans granted at fixed rates have been revised between January 2017 and December 2017 due to reporting errors from one bank. The revised data provide a more accurate evolution of bank lending on a yearly basis. Despite the variation in volumes, the interest rate of such mortgage loans remains barely unchanged.
