Financing your first home just got flexible
'Should we buy or rent?', ask Julie and Charel, a young couple in the process of making life's big decisions. Having recently completed their…
Julie and Charel have known each other since secondary school and have been inseparable ever since. After completing their studies in 2020, they decided to settle in Luxembourg and have since found a job where they feel well integrated and successful.
With their 30s fast approaching, the young couple now find themselves at an exciting and decisive crossroads in their lives. After renting a studio apartment since their return, the time has come to expand, so they've decided to buy their first flat.
But where to start? Before beginning their search, Julie and Charel find out about their financing options and analyse their savings, income, expenses and costs. They discuss their plans with Annick, their Spuerkeess housing advisor and use the home loan simulator to work out their personal budget.
Now that they know what their room for manoeuvre is, they start looking for a suitable property. After spending weeks looking at property ads and websites, they fall in love with a garden-level flat within walking distance of their jobs. Right from the first visit, the flat won their hearts: its space, brightness and beautiful terrace are advantages not to be overlooked. Given these features, this flat seems to be a good option for a first-time buyer.
But the excitement of finding the perfect flat soon gives way to questions about the complex world of mortgages. With student loans and early-career salaries, home ownership can be a headache.
When researching different mortgage options, terms such as "fixed rate", "variable rate" and "personal contribution" start to get mixed up and need some clarification. Julie and Charel even double-check the feasibility of their plans using the online simulator.
Feeling slightly overwhelmed and concerned to find financing that suits their budget and aspirations, Julie and Charel make another appointment with Annick, their Spuerkeess advisor, to work together on a financing plan that suits their means and finalise their purchase in full knowledge of the facts.
Drawing on all her expertise, Annick explains the various solutions available: fixed-rate or variable-rate home loans and a new solution called the "Flexibility Loan". Annick takes the time to explain the terms and conditions clearly and explicitly. Aware of their financial concerns, she devises a plan that meets Julie and Charel's goals.
In the end, the young couple opt for the Flexibility Loan, a home loan with progressive monthly repayments.
The Flexibility Loan reduces your monthly repayments and gives greater flexibility when it comes to repayments. It's a flexible formula, suitable for all ages and all life situations.
The Flexibility Loan allows the young couple to repay a lower amount at the start of the loan, which eases their monthly expenses at the start of their careers. This monthly payment will be adjusted according to the increase in their salaries over the next few years.
For their EUR 700.000 project, advisor Annick suggests the following formula for the young couple:
In the first few years, the monthly payment will be EUR 3.209, later adjusted to EUR 3.668.
It's a big relief for Julie and Charel, who now have a clearer idea about things and feel ready to make the right decision.
Thanks to Annick's excellent advice, they obtain their Flex Loan and sign their preliminary sales agreement with complete confidence, followed quickly by their deed of purchase to take possession of their very first flat.
The transition from renting to owning was a real adventure, but Julie and Charel know that the lower initial monthly payments will ease their financial burden and allow them to build up their savings again.
Over the years, Julie and Charel's careers have progressed, and their incomes have risen. Their family has grown and there have certainly been ups and downs and periods of budgetary adjustment. However, their Flexibility Loan enabled them to buy their own home, and together they explored their ability to adapt, grow together and build the life they'd imagined when they were younger.
With hindsight, the couple would do the same thing and own rather than rent, even though it was sometimes a rocky road!