News Letters

Friday 9 December 2016

Luxembourg's lesson on home debt

Published 16/04/2011 | 10:00

We should follow the method
of mortgage repayment used
by Luxembourg
We should follow the method of mortgage repayment used by Luxembourg

I WOULD like to explain a very simple way to offer mortgages that will not necessarily break the bank. I lived in Luxembourg for several years where my mortgage was based on a slightly different method.

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Basically, once arranged and agreed, a fixed repayment is calculated, after that, as interest rates rise and fall the length of time on the mortgage extends or contracts accordingly.

Let's say I need a mortgage for €100,000 and a 20-year term. I would agree with the bank the monthly repayments due at current interest rates and let's say that is €500, with a finishing date in April 2031.

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