Mortgage credit

The law of 23 December 2016 applies to credit agreements granted to private clients to purchase residential immovable property secured by a mortgage or by another comparable security and also to credit agreements whose purpose is to acquire, or retain, property rights relating to land or in an existing or planned building.

Some of the key provisions of the legal framework relate to:

  • Pre-contractual information disclosure and adequate explanation

The consumer should receive detailed information about the loan and its characteristics detailed in the European Standardised Information Sheet (ESIS) before being bound by any credit agreement. The ESIS should disclose the standardised annual percentage rate of charge (APRC).

The consumer should also receive an adequate explanation of the proposed credit agreement and any ancillary services.

  • Creditworthiness assessment

The creditor should analyse the consumer’s ability to meet the credit agreement’s obligations based on information on the consumer’s financial and economic situation. The procedures and information on which the assessment is based should be established, documented and retained.

  • Reflection period

The law provides for a 14-day reflection period before the conclusion of the credit agreement to allow the consumer to compare offers, assess their implications and make an informed decision as to whether to accept an offer. The consumer may accept the offer at any time during the reflection period.

  • Early repayment

The consumer has a right to early repayment in full or in part of a mortgage credit. In return, the creditor is entitled to fair and objectively justified compensation for any financial loss directly linked to the early repayment, within the limits laid down by the law.

  • After the conclusion of the contract, the creditor is required prior notification in case of a change in the interest rate
  • Specific requirements in terms of arrears and foreclosure are also required


Association des Banques et Banquiers, Luxembourg


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