Technical FAQ on CSSF Regulation No 20-08 on borrower-based measures for residential real estate credit (track changes) (Updated)
Executive Summary
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 Calculation: The regulation requires borrowers to satisfy specific own funds requirements. Own funds must consist of actual equity contributions from the borrower and can include cash collateral and proceeds fr
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
- Establishing procedures to ensure no new buy-to-let originations exceed 80% LTV after June 30, 2025
Key Dates
Compliance Impact
Urgency: HIGH
Who is Affected
Summary
Version of 9 March 2026