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Interest rates
29.08.2022
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 June 2022.
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 1.34% in June 2022 compared to 1.36% in May and the volume of these newly granted loans has increased by 30 million euros to reach 337 million euros in June compared to 307 million in May. On a yearly basis, the interest rate has increased by 5 basis points whereas the volume of newly granted loans has increased by 16 million euros.
The fixed[3] interest rate on mortgage loans granted to households increased by 21 basis points on a monthly basis between May and June to reach 2.26% in June 2022 while the volume of these newly granted loans has decreased by 78 million euros between the two months to reach 382 million euros. On a yearly basis, this interest rate increased by 90 basis points whereas the volume of newly granted loans has decreased by 170 million euros. On longer maturities, real estate loans with an initial rate fixation period over 10 year increased by 19 basis points to reach 2.3% in June 2022. The monthly volume of these newly granted loans decreased by 52 million on a monthly basis to reach 306 million euros in June 2022. On a yearly basis, this rate decreased by 87 basis points while the amount of newly granted loans shrank by 107 million euros. It is important to mention that this fixed rate includes all initial fixation periods above 10 years and is computed based on a sample of banks. The indicated rate is an average rate weighted on the volumes of granted loans. Furthermore, fixed rates with initial fixation periods on loans with very long maturities, like e.g. 30 years, can be significantly higher than this average rate mentioned above.
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 6 basis points on a monthly basis between May and April to reach 2.95% in June 2022. The volume of newly granted loans has increased by 2 million between May and June to reach 31 million euros in June. On a yearly basis, the interest rate has increased by 29 basis points whereas the volume of new lending has remained stable.
The interest rate on households’ fixed-term deposits that have an initial maturity below or equal to 1 year has reached 11 basis points in June 2022 from 10 basis points in May 2022. On a yearly basis, this rate has decreased by 10 basis points.
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 increased by 2 basis point in June 2022 at 1.34% compared to 1.32% in May and the volume has decreased by 118 million euros to reach 765 million in June from 883 in May. On a yearly basis, this interest rate has decreased by 5 basis points and the volume of newly granted loans has decreased by 84 million euros.
The variable2 interest rate on loans above 1 million euros granted to NFCs has decreased by 5 basis points on a monthly basis at 1.06% during the last reference period compared to 1.11% in May. The volume of newly granted loans has decreased by 353 million euros to reach 3 677 million euros in June compared to 4 030 in May. On a yearly basis, this interest rate has increased by 19 basis points and the volume of newly granted loans has decreased by 471 million euros.
The interest rate on fixed-term deposits of NFCs with an initial maturity below or equal to 1 year has increased by 17 basis points on a monthly basis between May and June to reach -0.07% in June 2022. On a yearly basis, this interest rate has increased by 19 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 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.
