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Formulas for the home loan rates
Do you intend to buy a house, an apartment, a plot of land or to build your own home? If so, you need a sound financial partner to finance your project. ING Luxembourg is there to help you to draw up a personal financing plan and to provide the funds you need.
home loan with a fixed rate
What are the advantages of the “fixed rate”?
When choosing a fixed-rate loan, you opt for certainty. The rate and therefore the amount of your monthly payments will remain unchanged during the entire term of your loan; thus you will never have any unpleasant surprises.
However, this formula does not allow you to make partial early repayments. Only repayment in full is allowed, subject to a repayment penalty.
home loan with a reviewable fixed rate
ING now offers you an innovative financing solution: the flexibility of variable rate financing combined with the security of fixed rate financing.
What are the advantages of the “reviewable fixed rate”?
The “reviewable fixed rate” is a fixed rate subject to periodical revision that allows you to secure your short or medium-term repayment capacity, whilst still maintaining the flexibility to go back to a variable rate for pre-defined periods in order to benefit from potential market opportunities.
- You are protected in the event of rate increases during your chosen fixed rate period (3, 5 or 10 years).
- You have the flexibility to choose the rate you want: upon expiry of each renewal period, based on the rates applicable at that moment, you can opt for a new fixed rate or a variable rate for the next period. This allows you to take maximum advantage of market opportunities.
- You have the freedom to choose without paying additional charges.
- You can change the type of rate for each renewal period.
- You can repay your loan early (fully or in part) without early repayment charges upon expiry of each renewal period.
- You benefit from transparency as regards the rate conditions applied throughout the duration of your contract.
For additional information, do not hesitate to get in touch with one of our relationship managers.
How does this work?
This is a tailored package which allows you to keep a fixed rate for 3, 5 or 10 years. At the end of each period, it is you who decides whether to continue with a fixed or variable rate until the end of the next period, and so on. Let’s take the example of a 20-year contract with a review period of five years. At the end of the first five-year period, you kept a fixed rate for the second period. For the third period, you chose to change to a variable rate. For the fourth period, you go back to a fixed rate.
The protection offered to you by a fixed rate during the first period(s) of your contract is substantial. The interest due is actually higher at the start of the contract than at the end.
home loan with a variable rate
Do you intend to buy a house, an apartment, a plot of land or to build your own home? If so, you need a sound financial partner to finance your project. ING Luxembourg is there to help you to draw up a personal financing plan and to provide the funds you need with the flexibility of a variable rate.
What are the characteristics of the variable rate?
- Your monthly payments increase or decrease following the overall rate changes in the financial markets.
- The variable-rate home loan has the great advantage of always allowing you to make partial additional repayments or even repay it in full or increase your monthly payments depending on your financial means without incurring any penalty payment at all. You can therefore shorten the term according to your financial means.
When making your application, we will clearly explain to you the effect of a change in rates on the monthly payments to be made. This will allow you to plan for the level of monthly repayment should the rates increase.
Need more information?
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How do you plan your home loan project in the face of rising interest rates?
War in Ukraine, the economic slowdown, soaring inflation: in these uncertain times, it's not always easy to make the right decisions, especially when they concern home loans. What should you look out for if you want to become a homeowner or if you still have a loan to repay?
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Renting or buying a property when arriving in Luxembourg?
The answer depends on how long you intend to stay in Luxembourg. If you stay in the country for a short time – less than 5 years-, renting is the best option. Owning your own home in Luxembourg is very expensive and not a very profitable short-term investment such as it is in other countries, even if the Grand Duchy is facing rising pressures on the housing market.
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Is insurance for the remaining balance due compulsory?
Accurately quantifying the cost of insurance for the remaining balance due is difficult, because in practice it is calculated on a case-by-case basis. It depends on your loan. The higher your capital to insure, the higher the premium will be.
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