What loans and mortgages for border workers?
02 NOV. 2016
Borrowing in Luxembourg to buy in Belgium, France or Germany has become commonplace. In addition to its attractive investments, Luxembourg also offers cross-border commuters many possibilities for loans and mortgages. Which bank to choose as border? What types of loans and mortgages are offered?
Where to go as a border to apply for a loan or credit?
Many Luxembourg banks allow cross-border workers to obtain a loan or mortgage. Banks operating on both sides of the border have developed tools and solutions adapted to cross-border workers.
The BGL bank has been part of the BNP Paribas sector since 2009. Preferred bank of professionals and SMEs, it has established itself in Luxembourg, but also in the Greater Region.
The International Bank (BIL) is known to cross-border workers for the tax advantages it allows them to obtain during bank placements. It is also renowned for its technological advances with the launch of a mobile application allowing cross-border commuters to manage their accounts from their homes.
The Bank and the Caisse d'Epargne of the State of Luxembourg (BCEE) have a good reputation among frontier workers. She accompanies them in all their projects and banking procedures. All banking transactions can be done on both sides of the border. In addition to attractive loan packages, this bank offers attractive insurance conditions. She is very popular with young households and people with little personal investment.
The oldest Fortuna bank is an ideal co-operative bank for a cross-border commuter who wants to save, take out a mortgage or build up pension savings. Each of these banks grants loans and mortgages for border workers under certain conditions.
To obtain credit for building at BIL, you will have to justify your work in Luxembourg. At BCEE, you will have to prove that you work in Luxembourg and that you live in a neighboring department.
Types of loans and mortgages for cross-border
Before choosing which organization to direct you to apply for a home loan, find out about the types of rates offered. Luxembourg banks can offer you a fixed rate, a fixed rate and / or a variable rate.
The choice of a fixed rate guarantees the payment of an unchanging monthly payment for the duration of your loan. The risk is decreased, but the flexibility is less. This type of rate provides a penalty for early repayment.
A floating rate will track the evolution of the financial markets and will generally be lower than the fixed rate. In case of early repayment, no penalty is payable.
Opting for a fixed rate that can be revised every 5 to 10 years offers you the guarantee of an unchanging monthly payment while having the possibility to review the rate regularly.
In terms of monthly payments, several choices are available to you. They can be constant, adjustable according to the evolution of the interest rates or progressive. The maximum duration allowed for repayment of the loan may vary depending on the banks. When choosing a financial institution, find out about the benefits depending on your country of residence. For example, the BGL bank offers an alternative to French cross-border workers by giving them the possibility of taking out a home loan guarantee (funds available more quickly, savings on fees, loans up to 30 years, etc.).
Cross- border workers in difficult situations (bank bans in France or Belgium) can apply for mortgage loans from certain Luxembourg banks, provided they live at the border and work in Luxembourg. Depending on the banks, a financial contribution may be required. It usually runs around 20% of the amount borrowed, but may vary depending on the organization.
To apply for a mortgage in Luxembourg, many decide to go through a broker to get advice on the most advantageous financing. The latter will also focus on optimizing your tax system because it knows the costs and the different markets very well. He will negotiate with the banking intermediaries to obtain for you the best rates, durations and guarantees.