To grant a mortgage loan, banking establishments require guarantees (personal contribution, mortgage, etc.). If someone is unable to provide a guarantee on their own that is sufficiently adequate to secure the loan they need for the construction, purchase or improvement of a dwelling, the Luxembourg State may help guarantee the loan, under certain conditions.

As mortgage loans may be secured from banks established outside of the Grand-Duchy of Luxembourg (approved in the European Union and in the European Economic Area), a State guarantee may also be granted for a loan from such banks or approved savings establishment, when all the conditions have been satisfied.

The State guarantee covers the portion of the loan that exceeds 60 % of the total cost of the investment, but without exceeding 30 %. The maximum amount of the State guarantee may not exceed EUR 153,135.00, which corresponds to the average annual value of the building price index in 2019, i.e., 816.72.

Who is concerned

Any person who wishes to secure a mortgage loan for the construction, purchase or improvement of a dwelling located in the Grand-Duchy of Luxembourg and used as the primary and permanent residence by the applicant and their spouse, as well as their forebears and descendants and/or those of their spouse that live in the same household.

Prerequisites

A person who wishes to receive the State guarantee must:

• hold a home loan savings account in the same banking establishment for at least 3 years, and must have made regular annual deposits on the account of at least EUR 290 for a period of 3 years as of the day on which the assets on the account were at least EUR 240;
• make sure that the amount of the monthly repayment on the loan does not exceed 40 % of their available income;
• secure a loan with an interest rate that does not exceed the limit set by Article 39, sub-paragraph 1 of the amended Grand-Ducal Regulation of 5 May 2011 by more than 3 %;
• secure from their financial establishment a loan corresponding to at least 60 % of the cost of the land and the construction work, or the cost of acquiring or remodelling and improving the dwelling.

To be eligible for the State guarantee, the loan must be guaranteed by a mortgage on the dwelling for which the loan has been granted.

How to proceed

The application for a State guarantee is submitted by the approved banking and savings establishment that is granting the loan, at the same time as the application to obtain individual housing aid. The application is filed using the aid application form, which must be completed and signed by the financial institution. 

The following items must be submitted with the application:

• the history of the transactions on the savings account over the previous 3 years (or copies of bank statements);
• a copy of the contract of sale agreement, dated and signed by all parties;
• a salary certificate in the name of the applicant (and their spouse);
• for non-Luxembourgish residents: a copy of the residence certificate, or a copy of the residence permit, or a copy of the certificate of registration, or a copy of their currently valid passport with a residence permit.

The recipient of the loan must inform the administration at the earliest opportunity of any change in their circumstances.

Forms / Online services

Who to contact