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Knowing how to renegotiate effectivel

CREDITSIMMO.LU, a partner of choice in all circumstances! In Luxembourg, any customer is allowed to repay a variable interest rate loan at any time and replace it with another fixed or variable interest rate loan, subject to certain terms and conditions. On the other hand, renegotiating a fixed rate can be just as interesting, especially since the European directive of the end of 2016 limiting the amount of penalties to six months of interest for any loan granted since the end of March of that year.

The same regulation also applies to early repayment of fixed-rate loans up to a maximum amount of 450,000 euros, provided that you have occupied the property yourself for at least two years. But why all the fuss about rates lately?

Georges SPANIER CEO & Founder

Why the sudden rise in interest rates?

In fact, the recent rise in interest rates - since the end of last spring - can be explained mainly by the recent and persistent jump in inflation. This has been compounded by the inflation expectations of economic agents, as well as the impact of central bank actions in response to inflation deviating from the monetary authorities' medium-term price stability objective. Contrary to what some people may believe, the "Everyman's" bank does not intervene freely in the setting of rates. Nevertheless, given the way they are financed, in this case on the financial markets, the latter become de facto dependent on the rates in force on these same markets, whether cyclically or structurally. Of course, after having established more or less precise estimates in a perspective of consistency and of consistency and optimization of their short- and medium-term financing policy, or even longer, the banks would then be in a position to make precise credit offers to companies and households for the financing of their investment projects and/or for their specific short-term liquidity needs. The interest rate levels (fixed or variable) offered by these banking institutions to their counterparts will depend on both the cost of their refinancing on the interbank and/or bond markets, which are dependent on the key rates set by central banks.

New approaches

For the time being the low policy rates adopted by central banks for more than a decade are intended to support domestic economies, encourage productive investment and, in turn, economic growth. However, the persistence of a low interest rate environment - which has been accompanied in recent years by complementary monetary policy measures known as unconventional - has obviously increased the quantity of money available in the economic circuit. Knowing that the excess quantity of money eventually translates into a generalized rise in price levels, in the long run the

In the long run, inflation remains a purely monetary phenomenon. In the European Union, in order to avoid a significant gap between the price target and the evolution of prices, the ECB has the necessary instruments to make inflation converge towards the initial target.

Thus, the use of a gradual increase in interest rates to affect aggregate demand remains by far the preferred and most effective instrument of the major central banks to maintain price stability. It is not surprising that bank customers - whether households or businesses - would be concerned about the potential impact of such an economic situation on their home loans and other forms of credit.

CREDITSIMMO.LU, the friend who knows how to listen and reassure

In times of crisis that are likely to last, CREDITSIMMO.LU knows how to support its regular customers - as well as new aspiring homeowners - who too often waste their time procrastinating. In particular when it comes to renegotiating their credit offer, or even anticipating the balance of a loan despite the risk of penalties. For example, in the face of a generalized rise in interest rates that has been going on for several months and that seems to be a major change in the market.

for 2022, the purchasing capacity of new buyers is being strongly impacted. And with fixed rates over 25 years that have already more than doubled, it is advisable to seek advice from a broker such as CREDITSIMMO.LU. Indeed, it is once in the rough and in the heart of the storm that last minute miracle solutions are needed. And this is precisely one of the specialties of Georges Spanier and his staff, who are never reluctant to assist and support their clients in all circumstances.

If necessary, CREDITSIMMO.LU will be able to analyze, compare and select the numerous offers that best meet the needs - and the capabilities - of its clients. And to insist on the different possibilities that prevail, in particular by agreeing on alternatives such as the combination of fixed and variable rates - for their part still relatively low - thanks to which one can easily envisage a significant reduction in the average cost of credit. In the end, it doesn't matter what the outcome will be, because the main step in the process is naturally through CREDITSIMMO.LU... Tél.:00352466043–1


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