Buying or renting in Luxembourg: the eternal dilemma
The question 'should I buy or rent?' is particularly acute in Luxembourg, where the median apartment price exceeds EUR 620,000 in 2026. The total cost of ownership (TCO) includes not just loan repayments but also acquisition costs (7-10%), maintenance (1-2% of price/year), insurance, property tax and opportunity cost of capital.
Renting, meanwhile, is regulated by the 5% cap on invested capital (law of 21 September 2006). Our simulator compares both scenarios over a customisable horizon.
Total cost of ownership vs. total cost of renting
For an objective comparison, our tool calculates the cumulative total cost of both options:
- Purchase: deposit, acquisition costs, loan payments, insurance, maintenance, property tax, less net capital gain at resale
- Rental: cumulative rents (indexed to inflation), initial deposit, insurance, plus investment return on savings
The crossover point in Luxembourg typically falls between 7 and 15 years.
The mortgage leverage effect
A major argument for buying is the leverage effect of a mortgage. With a 20% deposit on a EUR 600,000 property, the buyer benefits from capital appreciation on 100% of the property value. Banks in Luxembourg typically finance up to 80-100% (LTV ratio).
Break-even point and decision factors
The break-even point depends on many factors:
- Expected stay duration: below 5-7 years, renting is almost always cheaper due to high acquisition costs
- Interest rates: low rates (< 3%) favour buying; high rates (> 5%) favour renting
- Price evolution: appreciation > 2%/year significantly shortens the crossover point