Real Estate Financing in Luxembourg: A Practical Guide

Published on October 1, 2025 and written by Cyril Jarnias

Luxembourg, a small country at the heart of Europe, attracts numerous real estate investors thanks to its economic and political stability, favorable tax framework, and high quality of life. Whether you’re a resident or non-resident, obtaining real estate financing in the Grand Duchy is entirely possible, but requires a good understanding of the local market specifics. In this article, we guide you through the key steps to realize your real estate project in Luxembourg.

A Market Open to Foreign Investors

Good news for non-residents: Luxembourg welcomes foreign investors favorably in its real estate market. Unlike some countries that impose restrictions on non-national buyers, the Grand Duchy offers an open and transparent regulatory framework.

Luxembourg banks are accustomed to dealing with an international clientele and offer financing solutions tailored to the varied profiles of investors. Whether it’s purchasing a primary residence, a rental investment, or a commercial property, the country’s financial institutions review applications case by case, without discrimination based on nationality.

However, it’s important to note that loan approval conditions may vary depending on your resident or non-resident status. Luxembourg banks generally apply stricter criteria for non-resident borrowers, particularly in terms of personal contribution and required guarantees.

To maximize your chances of obtaining financing as a foreigner, it is recommended to:

• Prepare a strong application demonstrating your financial capacity
• Prefer banks with experience in international clientele
• Use a specialized broker familiar with the Luxembourg market
• Consider opening a bank account in Luxembourg to facilitate transactions

Building a Solid Application: Essential Documents

To convince Luxembourg banks to finance your real estate project, the quality and completeness of your application are crucial. Here is the list of documents generally required for a mortgage loan application in Luxembourg:

• Valid identification (passport or ID card)
• Proof of income for the last 3 months (pay stubs, bank statements)
• Tax notices for the last 2 years
• Statements for all your bank accounts for the last 3 months
• Proof of assets (savings, investments, real estate properties)
• Purchase agreement or detailed quote for construction work (for a construction project)
• Provisional financing plan
• Updated curriculum vitae

For non-residents, additional documents may be required:

• Tax residency certificate
• Proof of address in your country of residence
• Sworn translation of documents not written in French, German, or English

It is crucial to prepare these documents in advance and present them clearly and organized. A well-structured application demonstrates your seriousness and facilitates the bank’s analysis work, thus increasing your chances of obtaining financing under favorable conditions.

Keys to Securing Your Financing: Eligibility Criteria

Luxembourg banks apply strict criteria to assess borrowers’ creditworthiness and minimize risks. Here are the main elements considered in reviewing your application:

• Debt-to-income ratio: It generally should not exceed 33% to 35% of your net income. This ratio includes all your credit obligations (mortgage, consumer loans, etc.).
• Personal contribution: Luxembourg banks typically require a minimum contribution of 20% of the purchase price. For non-residents, this percentage can go up to 30% or 40%.
• Employment stability: A permanent contract and seniority in your current job are important assets.
• Income: Your income must be sufficient and stable to cover the loan payments and your current expenses.
• Assets: The presence of substantial savings or other real estate properties is reassuring for the bank.
• Age: The loan term is generally limited so that repayment is completed before you reach 65-70 years old.

For non-residents, additional criteria may apply:

• A preference for borrowers from neighboring countries or the European Union
• Increased requirements for guarantees (pledge of financial assets, bank guarantee, etc.)
• Particular attention paid to the political and economic stability of your country of residence

It’s important to note that these criteria can vary from one bank to another. Don’t hesitate to approach multiple institutions or use a specialized broker to find the solution best suited to your situation.

Conclusion: An Accessible Investment That Requires Meticulous Preparation

Obtaining real estate financing in Luxembourg is entirely possible for foreign investors, provided you prepare well and understand the specifics of the local market. The quality of your application, your financial situation, and your ability to meet the requirements of Luxembourg banks will be decisive in realizing your project.

Don’t forget that the Luxembourg real estate market is particularly competitive. Good preparation in advance, particularly by obtaining a financing pre-approval, will allow you to be more responsive and credible in your acquisition process.

Finally, don’t hesitate to be accompanied by experienced professionals (brokers, real estate agents, notaries) who are familiar with the subtleties of the Luxembourg market. Their expertise can prove invaluable in navigating this process and optimizing your chances of success.