Consumer Credit Regulations in Luxembourg

The CSSF Technical FAQ on Regulation No 20-08 provides implementation guidance on **loan-to-value (LTV) limits for residential real estate credit in Luxembourg**, establishing borrower-based macroprudential measures designed to limit leverage in the mortgage market. This guidance is critical for lenders operating in Luxembourg as it clarifies how to calculate own funds, determine LTV compliance, and apply temporary portfolio exemptions that have been extended through June 30, 2025.

What Changed

The most recent update (March 9, 2026) to the Technical FAQ reflects the regulatory framework established by CSSF Regulation No 20-08 (as modified by Regulation No 24-10). The core LTV requirements are: *Primary Residence Loans: First-time buyers: LTV limit of up to 100% Other buyers**: LTV limit of 90%, implemented via portfolio allowance *Buy-to-Let Residential Loans:** Standard LTV limit of 80% Temporary exemption (until June 30, 2025): Lenders may apply LTV ratios up to 95% for up to 10% of annual production *Other Residential Real Estate Loans:** LTV limit of 80% *Own Funds...

What You Need To Do

*For all lenders
*Implement dual LTV tracking for borrowers financing new property through sale of existing property, ensuring compliance with both interim and final LTV ratios
*Document own funds sources carefully, particularly when cash collateral or sale proceeds are used, as these are only permitted for loans with initial LTV below 100%
*Prepare for June 30, 2025 transition by
Identifying all buy-to-let loans currently benefiting from the 95% LTV exemption

Key Dates

January 1, 2021 - Regulation and LTV limits became effective for residential real estate credit on Luxembourg territory

December 3, 2020 - CSSF Regulation No 20-08 originally published

May 21, 2024 - CSSF Regulation No 24-04 introduced temporary adjustments to LTV limits

December 30, 2024 - CSSF Regulation No 24-10 extended temporary adjustments

June 30, 2025 - **CRITICAL DEADLINE**: Temporary portfolio allowance for buy-to-let loans (95% LTV for 10% of annual production) expires; all buy-to-let loans revert to 80% LTV limit DEADLINE