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Interest rates
04.03.2019
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 December 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 November 2018 to reach 1.45% during December 2018 whereas the volume of these newly granted loans has increased by 193 million euros on a monthly basis to reach 440 million euros during December 2018. On a yearly basis, the interest rate has decreased by 10 basis points whereas the volume of newly granted loans has increased by 169 million euros.
The fixed[3] interest rate on mortgage loans granted to households has decreased by 6 basis points since November 2018 to reach 1.86% during December 2018. The volume of these newly granted loans has increased by 123 million euros on a monthly basis and has consequently amounted to 428 million euros during the last reference period. On a yearly basis, this interest rate has increased by 4 basis points and the volume of newly granted loans has increased by 65 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 increased by 18 basis points on a monthly basis to reach 2.79% in December 2018 whereas the volume of newly granted loans has decreased by 7 million euros on a monthly basis to reach 15 million euros during December 2018. On a yearly basis, both the new business volume and the interest rate have remained broadly stable.
The interest rate on households’ fixed-term deposits that have an initial maturity below or equal to 1 year has increased by 11 basis points on a monthly basis to reach 21 basis points in December 2018.
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 3 basis points on a monthly basis to reach 1.65% in December 2018. The volume of newly granted loans has increased by 129 million euros on a monthly basis, reaching 908 million euros in December 2018. On a yearly basis, this interest rate has decreased by 5 basis points and the volume of newly granted loans has increased by 47 million euros.
The variable2 interest rate on loans above 1 million euros granted to NFCs has increased by 2 basis points on a monthly basis to reach 1.24% during December 2018 while the new business volume has decreased by 168 million euros and has consequently amounted to 5 643 million euros during the last reference period. On a yearly basis, this interest rate has increased by 7 basis points and the volume of newly granted loans has increased by 366 million euros.
The interest rate on fixed-term deposits of NFCs with an initial maturity below or equal to 1 year has reached -24 basis points during last reference period from -28 basis points during November 2018.
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 only since February 2009 because of 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. The revised data provide a more accurate evolution of bank lending on a yearly basis. Despite the variation in volumes, the interest rate has barely changed in light of these revisions.
