ECB refinancing rates

The refinancing rate of the European Central Bank (ECB) is the interest rate that banks have to pay when they borrow money from the ECB.

After the rate remained unchanged at 0.0% for more than 6 years since March 10, 2016, it was raised twice by 0.5% and twice by 0.75% in 2022, reaching 2.5% on December 15, 2022. During 2023, the ECB maintained its course and continued to regularly raise the refinancing rate in order to counter the high inflation in the European Economic Area. In September 2023, it reached its current peak of 4.5%. After inflation in the EU area fell below 2.5% in 2024, the ECB adjusted the refinancing rate to 4.25% on June 12, 2024. This was the first cut after the rate had been steadily increased for nearly two years.

Mortgage rates react with a delay to changes in the refinancing rate. As a rule, a change in this rate also leads to a change in mortgage rates. Most banks in Luxembourg have not yet passed on the latest changes in the refinancing rate to the interest rates on their mortgages. It is therefore expected that mortgage rates will continue to rise in the coming months.

In the following table, you will find the values for the ECB refinancing rate since January 2009.