GUIDE TO HOUSING LOANS

Transcription

1 Tax deductions Government aids Guarantees Financing Instalments Conditions Interest rates Insurances Pre-sale agreement Loan duration Municipality aids Procedures GUIDE TO HOUSING LOANS

2 SUMMARY When and why apply for a housing loan? Different types of housing loans : a solution for each situation! How much can you borrow? What is your maximum budget? How to finance your project? Your financing plan Guarantees Costs of a housing loan APPENDIX

3 Housing aids Environmental issues and aids Take advantage of an interest rate bonus with etika Tax matters Insurances Practical advice Preparing your housing loan application Your online loan application on Ten good reasons to choose BCEE I II III IV V Interest rates and monthly instalments Your personal financing plan BCEE branch network Useful addresses Code of conduct

4 Guarantees? Variable interest rate? Insurance? 2

5 Are you planning to build, buy or renovate/refurbish a home? Such a project is a considerable investment that requires careful preparation and a trustworthy financial partner. Depending on the nature of your project and on your personal situation, various financing solutions are open to you. Our advisors are at your disposal to develop, with you, a tailor-made financing plan perfectly suited to your needs. Moreover they will guide you through the available State aids and will provide you with practical advice. Do not hesitate to call on one of our advisors at any BCEE finance centre or branch of your choice. A complete list of our branches can be found in the appendix. A housing loan: easy with good guidance...

6 When and why apply for a housing loan? Buying, building or even renovating/refurbishing a home requires substantial funds. As financing such a project on personal funds is rarely possible, a housing loan is the perfect solution. ADVICE Before actively embarking on a real estate project, we recommend you to visit any BCEE branch to find out how much you may borrow. A clear vision of your budget and your financing possibilities will help avoid unnecessary steps and will save you time. A housing loan provides funds for: the acquiring of an existing house or apartment, the building of a home, the renovating or refurbishing of a home, the buying of building land. There are several types of housing loans with a duration up to 30 years. 4

7 Different types of housing loans: a solution for each situation! Each real estate project is unique and requires individual processing. Our advisors will give you their attention to develop, with you, a tailor-made financing plan perfectly suited to your needs. The main features of our different housing loans are listed below. Standard fixed rate housing loan Fixed monthly instalments during the fixed interest rate period, secures your budget against interest rate increases, fixed interest rate terms (until revision): 5, 10, 15 or 20 years, extraordinary repayment only possible upon expiry of the fixed interest rate period. Otherwise, if applicable, payment of an early repayment penalty taking into account the prevailing market bid rates for the remaining period of the loan, maximum loan term: 30 years. Standard variable rate housing loan Monthly instalments adjusted according to base rate variations, early repayment possible at any time and without penalty, maximum loan term: 30 years. Split rate housing loan ADVICE Depending on your project and individual circumstances, a financing plan that combines several types of housing loans may turn out to be most suited. Speak to one of our advisors for a custom-made offer that meets your personal needs. By financing your project with a loan where a portion is on a fixed rate basis and the other portion is on a variable rate basis, you may benefit from the advantages of both types of rates: flexibility of early repayment on the variable part, monthly instalments on the fixed part will not change. LOGI FLEX housing loan Loan that is split into two parts: -- standard part where monthly instalments include capital and interests, -- in fine part where monthly instalments are limited to the accrued interest whereas the borrowed capital becomes payable at latest upon maturity of the loan, reduced monthly instalments, increased repayment flexibility, maximum loan term: 25 years.

8 EcoPrêt ENERGIE Intended to finance energy-efficient home improvement on existing homes, a preferentiel interest rate, no mortgage registration, condition for approval: State aids must be granted for your project, limited to an amount of EUR 50,000, maximum loan term: 10 years. Bridge loan Intermediary financing solution pending the sale of a building or a certain inflow of funds (i.e. payment of life-insurance), interest payable in monthly instalments, capital can be reimbursed upon maturity of the bridge loan, maximum loan duration, in principle: 24 months. BHW Housing savings scheme If you have taken out a housing savings plan such as a BHW savings scheme, we can offer you intermediary financing until maturity of your housing savings plan (+/- 12 years). Thus the part of the housing loan financed this way is paid off by the allocated benefits of the housing savings plan. In the meantime you pay the interests to BCEE and the amount of savings to the housing savings institution BHW according to the contract. This method is particularly attractive from a tax perspective. ADVICE The association etika Initiativ fir Alternativ Finanzéierung a.s.b.l., in cooperation with BCEE offers an additional interest rate advantage to private individuals planning to finance a housing project that meets strict environmental requirements. For further information, visit and or see page 14. 6

9 EUR 200,000 EUR 400,000 EUR 600,000 How much can you borrow? What is your maximum budget? ADVICE The simulation tool available on will give you an estimate of your monthly instalments. However it will never completely take into consideration your particular situation. Each real estate project is unique and therefore requires individual handling. Before actively embarking on a real estate project, find out how much you may borrow. This will help you to identify the real estate object that suits your budget. The amount you may borrow will depend on many factors, such as your ability to repay the loan and your personal assets to be invested in the project. Our advisors will use these two elements to draw up a financing plan, allowing to determine the maximum amount you may borrow and thus, the maximum price of the real estate asset you may acquire.

10 ADVICE Complete the attached financing plan for a rough estimate of the financial aspect of your real estate project and to prepare your appointment with one of our advisors. How to finance your project? Your financing plan Our advisors will assist you in drawing up your personalised financing plan. In a simplified way, a financing plan may be summarized as follows: 1. Calculation of the total costs of the real estate project : sum of all direct and indirect costs related to your real estate project. 2. Determination of your own financial input: sum of all your personal means that can be invested in your project. 3. Determination of the amount to be borrowed: by subtracting your personal means from the total costs, you get the amount you will have to borrow to finance your real estate project. 4. Determination of your ability to repay: your ability to repay corresponds to the total of your regular income (salaries, family allowances...) minus the total of your regular expenses (monthly instalments for existing loans...). It is generally accepted that one third of the available income can be used for the repayment of a housing loan. However, this ratio may be exceeded as long as a balanced budget is maintained. Don t forget to set aside a part of your budget for maintenance expenses. 8

11 Guarantees For our housing loans, except for EcoPrêt ENERGIE loans, we require, in principle, a 1st rank mortgage on the real estate asset and an assignment of wages. Additional guarantees to the mortgage that you or a third party may grant are: a mortgage on another real estate asset, a bank guarantee, collateral (cash or securities), the assignment of the benefits of a housing savings scheme, the assignment of the benefits of a life insurance policy, a security from a third party, a State guarantee, etc. ADVICE Draw up a list of possible guarantees as you prepare for your first appointment at our branch. The amount you may borrow will depend on your own financial means, on your ability to repay and on the guarantees you will provide. As a general rule, bank financing may amount to 85% of the guarantees on condition that your financing plan is insured and that your repayment ability has not been exceeded.

12 ADVICE A comparison of the various housing loan offers is only objective if the Annual Percentage Rate is considered. Only the APR of charge takes into account all the additional fees that are charged by the financial institutions. Cost of a housing loan Each housing loan is subject to the payment of interest that varies according to the interest rate of the type of the housing loan chosen. Our interest rate offers are competitive, making BCEE your privileged partner in home financing. Besides interest rates, additional fees have to be taken into consideration: loan application fee, deed fees. The fees charged by BCEE include fees that are inherent to the mortgage contract drawn up by BCEE and to the mortgage registration with the Luxembourg mortgage office. Apart from the mortgage release fees charged at the final pay-off of the loan, no further loan application fees will be charged at your expense by BCEE. However, for guarantees abroad, the related mortgage registration fees will have to be paid personally. Please also note that BCEE will communicate the APR (Annual Percentage Rate of charge) on your housing loan in a clear and transparent manner. Our loan simulator on will give you an estimate of your monthly instalments. Please bear in mind that only a concrete offer will take into account your personal circumstances. 10

13 Housing aids For acquiring, building or renovating/refurbishing a real estate asset, the Luxembourg government as well as several local authorities grant financial aids. The granting conditions and the amount of most of these aids (capital aids and interest subsidies) depend on your family and financial situation, your income and the living area of the real estate asset to finance. These aids are included in your own financial funds to invest in your project. For housing built after 10 September, 1944, the following limits are to be respected: 65m² living area of a house 140m² 45m² living area of an apartment 120m² These limits are to be increased by 20m² from the third dependent child and under certain conditions, by 20m² for any ascendent living in the same household that counts more than four members. ADVICE The personalised advice we offer in our branches includes all the information regarding State housing aids. If, prior to an appointment with one of our advisors you wish to obtain further information on the amounts and the conditions under which such aids are granted, please refer to: Service des Aides au Logement 11, rue de Hollerich L-1741 Luxembourg Tel. : (+352) Here below you will find an outline of the main available aids as on 31 December, For a complete list and for details on the granting conditions of such State aids, we recommend that you get in touch with one of our advisors or the Service des Aides au Logement ( The legislation in force shall be applicable. Capital aids Construction grants for the construction of a home or the first occupation of an existing home (max. EUR 9,700). Acquisition grants for the purchase of a home previously occupied (max. EUR 9,700). Improvement grants to finance part of the renovation of a house no less than 15 years old (max. EUR 10,000). Savings premiums which depend on related interests on your different savings accounts (max. EUR 5,000). Grants for architect fees (max. EUR 1,250). Grants for renovations to meet the needs of the physically disabled. Grants in the framework of the dependency insurance to finance work that will allow dependent individuals to remain in their homes. Tax credits on notary deeds Resident individuals may be granted a tax credit to be claimed on the registration and transcription duties usually due when acquiring property or land intended for personal and principal use. For a couple acquiring property, the amount of the grant is doubled. Tax credits are subject to conditions. More information on

14 Super-reduced VAT rate When building or renovating your own home under specific conditions and up to a specific amount you may be eligible for a super-reduced VAT rate of 3%. When buying a home that is new or has not been lived in you may apply for a partial VAT restitution. More information on ADVICE If you are planning to buy an existing home where renovation and/or refurbishment work is required, speak to the current owner first to enquire whether he already benefitted from the super-reduced VAT rate on the real estate asset and to find out what the remaining limit is. Interests aids Interest relief, which is related to an income condition, is calculated on the basis of the number of dependent children in the household and may result in a reduction of your monthly mortgage instalments. Interest subsidy, which depends on your family and financial situation, is also subject to living area and occupancy duration conditions. The subsidy represents one possibility to reduce your monthly mortgage instalments. It must be noted that, both for interest subsidy as well as interest relief, the borrowed capital is taken into consideration up to a maximum amount of EUR 175,000; it may be increased by EUR 50,000 for all investment intended to promote and to rationally utilize energy, as well as to promote renewable energies. State guarantees Should you not be able to provide sufficient personal guarantees, the State may vouch for your loan through a State guarantee, provided that you had been accumulating savings for at least 3 years beforehand. Local authority aids Some local authorities offer acquisition and/or construction bonuses, as existing under the legislation of the "Fonction Publique", and subsidies for the energy rehabilitation of existing homes. For further information, consult your local authority. 12

15 Environmental issues and aids Building in an environmentally respectful way should not be limited to a fashion phenomenon. It also means acting as a responsible citizen, displaying respect towards future generations and reducing energy expenses on a daily basis. The Luxembourg government has developed a range of financial grants to promote a rational use of energy and foster renewable energy. ADVICE Before embarking on an environmentally friendly construction or renovation project, find out whether there might be subsidies available to you. We also recommend that you make an appointment with an independent energy advisor. Expert in the field, he will guide you through the various aids and will also offer an objective opinion on the usefulness and need for the work in consideration. BCEE is supporting this policy through its "EcoPrêt ENERGIE", product which offers preferential rates for the renovation of an existing home as long as these investments are also eligible for State aids. Hereunder an overview of the works for which State grants may be applied: construction of a passive house (class AA), improvement of thermal cladding on existing houses, energy consulting services, condensing boilers and hydraulic balancing, photovoltaic solar collectors, solar thermal installation, heat pumps, geothermal heat exchange systems, central heating with wood pellets or log stoves, boilers on biomass fuel in connection with thermal solar collectors, micro-cogeneration units based on renewable energy, installations and/or connections to a heat supply network fuelled by no less than 75% of renewable energy, installations of controlled ventilation systems with or without heat recovery. For further details on the application conditions and the amounts of such aids, as provided for by Law, please speak to our advisors at any of our branches or refer directly to the appropriate ministry: Ministère du Développement durable et des Infrastructures 4, Place de l Europe L-1499 Luxembourg Tel.: (+352) Please note that some local authorities also offer such aids.

16 Take advantage of an interest rate advantage with etika The association etika "Initiativ fir Alternativ Finanzéierung a.s.b.l.", in cooperation with BCEE, offers interest rate advantages on loans to private individuals seeking to finance the construction or insulation of their home in compliance with certain environmental standards. This interest rate advantage, granted within the framework of BCEE s housing loan and "Eco- Prêt ENERGIE" offer, is dependent on the financial aids granted to private individuals in application of the Luxembourg ruling of 20 April, 2009 by the Ministry for Sustainable Development and Infrastructures. Financing your project using this mechanism results in a double advantage: 1. financial aids from the "Ministère du Développement durable et des Infrastructures" and 2. etika interest rate advantage. The application conditions of the etika advantage are as follows: the interest rate advantage is applicable to an amount of above EUR 10,000 and below EUR 300,000; the maximum duration of the interest rate advantage is 10 years; the offer for such an interest rate advantage is limited in time. If you wish to apply for an etika advantage or obtain further information on this offer and its conditions, please contact: etika Initiativ fir Alternativ Finanzéierung a.s.b.l. 55, avenue de la Liberté L-1931 Luxembourg Tel/fax: (+352) [email protected] 14

17 5% 4% Tax matters 3% Besides direct financial aids, the legislator has implemented a number of tax incentives to encourage home ownership. You will find below an overview of the tax measures as at 31 December, For further details on these indirect housing aids, we recommend that you contact our advisors in our branches or your tax office. The legislation in force shall be applicable. Deductions of debit interest You may deduct, in part or in full, the debit interest on your housing loan. ADVICE Speak to your BCEE advisor about tax benefits on insurances linked to your home mortgage! The legislation provides debit interest deductions for the three following scenarios: construction or renovation/refurbishment of a home to be occupied by the owner, purchase of building land, acquisition of accommodation intended for rental. The procedures for such debit interest deductions depend on the intended use of the real estate asset the loan has been applied for. BHW Housing savings scheme Payments made into a BHW Housing savings scheme may be deducted from your taxable income up to an annual amount of EUR 672 per member of the household. Insurances The single premium for a credit life insurance covering the remaining balance of a housing loan in the event of death is tax deductible. The deductible amount depends on your age and the composition of your household (between EUR 6,000 and EUR 31,200). The residual debt insurance yearly paid premiums can be fiscally deducted to the amount of EUR 672 per household member.

18 Insurances Thanks to our partner La Luxembourgeoise, BCEE can offer you all insurances you may need for your real estate project. For your housing loan the following insurance coverages are recommended or even compulsory: Credit life insurance This insurance covers the outstanding balance of your debt and protects the family assets in case of death. The "invalidity" option allows compensation for any loss of income as a result of a partial or total permanent invalidity. "Globale Habitation" Home Insurance This multirisk home insurance covers your real estate asset against major risks including fire. Additional covers can be included in the contract to meet your requirements. 10-year liability insurance The 10-year liability insurance covers, for 10 years, respectively 2 years after the construction of a residential house, deficiencies in construction or materials. APROBAT lalux assurances, as the single point of contact in the event of a deficiency, helps settling problems arising from conflicts of interest between the different building trades and the delays that may result from those. Private third party liability insurance This insurance protects you and your family against the financial consequences of causing loss or damage to a third party. 16

19 Practical advice You will find below a list of some questions relating to your real estate project. Our advisors remain at your disposal to discuss any further issues and to provide you with practical advice relevant to your personal project. You are buying land: is the land in an authorised building area? what is the buildable gross floor area? what type of construction is permitted on this land? are there any compulsory construction deadlines? are there any easements? are connections to public utilities available (power, gas, telephone, water, sewage)? If not, what are the initial connection charges? is the price in line with the market price in the area, town and neighbourhood? how does the geographic location of the land compare with your usual commutes (work place, school, public transport)? what local facilities are available (shops, schools...)? what does the building permit cost? etc. You are buying an existing apartment or house: does the building require any renovation in the near future (replace the heating system or the electric circuitry...)? what will the cost of this work be? will this work require a building permit? what is the expert s opinion concerning the price and condition of the asset? in case of an apartment: - what resolutions were passed at the last co-owners meeting? - what are the shared expenses? - is any work on the building scheduled? If so, how will the costs be shared? - what rights and obligations result from the internal rules? etc

20 You are buying on plan: into what energy category will the building fall? have you carefully read the specifications and are they comprehensive and complete? have you carefully looked at the construction plans and the contract? are the various works and their costs detailed in the contract? does the property developer propose an additional ten-year guarantee? is there a performance bond in case of failure on behalf of the seller? (only in case of vertical land survey ) when does the construction start and when does it finish? etc. ADVICE Before signing make repeated visits of the object, ideally at different times of the day and days of the week. It is better to take the time even if this means running the risk of missing a good deal, than to enter into a long-term commitment with an asset that does not really meet your expectations. You are building a house: would you rather manage the project yourself or have a turnkey project? in case of the first, do you have the necessary time and know-how to achieve a project of this scope? in case of the second, have you found a reliable architect to lead this project to completion? do the plans meet your expectations? do you already have the required permits? have you had an energy performance certificate issued ( Energiepass )? which energy category will your house be classed into and what is the estimate of energy costs? etc. Regardless of the nature of the project, before signing anything, go on site and ask yourself all the relevant questions. The local authority, the notary, the land survey office and the neighbourhood will provide you with answers to some of these questions. Once you have found your asset, make sure the building/land is described as precisely as possible on the pre-sale agreement. This would include the land survey indication, correct address and, in case of an apartment, the accurate surface area. A sale pre-contract is usually limited in time (usually 30 days), may contain opt-out clauses to be negotiated and also includes in case of a housing loan, a suspension clause providing for cancellation of the contract if the loan is not granted. If you plan to finance your acquisition with a loan, it is vital that the name of your bank figures in the pre-sale agreement. Upon hand-over of your newly built home make sure a hand-over statement is issued and signed along with the seller indicating the possible defects and uncompleted works. 18

21 Preparing your housing loan application To enable us to make a firm offer in the shortest possible time, your application file should be as complete as possible. You will find below a list of the necessary documents for your housing loan application. ADVICE Prepare your application file carefully and include as far as possible all the required documents for your first appointment at a BCEE branch. The more complete your application is, the better our advice and the faster we can make a firm offer. 1) Purchase or renovation/refurbishment of a home: identity document and social security number of the applicant(s), proof of income (payroll or salary record, pension...), pre-sale agreement, photographs of the object, where appropriate, a quote for renovation/refurbishment costs, energy performance certificate ( Energiepass ) of the asset in case of purchase, annual income over 3 years prior to purchase (only in case of application for State aids). 2) Construction of a home: identity document and social security number of applicant(s), proof of income (payroll or salary record, pension...), notarised deed on land, or pre-draft thereof, plans, detailed quotes and where appropriate, specifications, energy performance certificate ( Energiepass ), annual income of 3 years prior to acquisition (only in case of application for State aids).

22 ADVICE If this is your first housing loan application, we recommend you make an appointment with one of our advisors in order to benefit from a personalised advice. Your online housing loan application via or via the Online Branch Other than the personal advice in one of our branches, you may submit your housing loan application via our website On our website, you will find all information about our housing loan offers alongside with our other products and services. You may also complete a contact form to arrange for an appointment with one of our advisors or refer to the list of branches. If you do not want to visit your branch, simply use the services offered by our Online Branch. You may contact our experienced advisors by: phone at (+352) , at [email protected], Skype at the address "BCEE Agence Online". 20

23 Ten good reasons to choose BCEE 1 A trustworthy partner When entering a long-term commitment, such as a housing loan, it is vital to rely on a financial partner with solid foundations. BCEE is your obvious trusted partner in this area. ADVICE A commitment as considerable as a real estate investment can only be made with a trusted financial partner Number 1 BCEE has always been the leader in the field of housing loans in the Grand-Duchy of Luxembourg. Experience BCEE has been active in the field of housing loans for over eighty years. Particularly attractive conditions BCEE applies very competitive interest rates and handling fees on housing loans. They are clear, transparent and there are no hidden costs! A complete range and personalised offers BCEE offers a complete range of housing loans. We can, therefore, develop a personal financing plan that is specifically suited to your individual situation and your project.

24 Comprehensive advice Our advisors will be pleased to guide you through available State aids and provide you with practical advice. Short decision-making time Time is essential when buying a home. You can count on our swift reaction. Flexibility When entering a long-term commitment there is always a risk of contingencies. Whatever unexpected events life brings we will always try to find a solution with you. A local service BCEE has the largest branch network in the country, including 14 finance centres. Code of Conduct BCEE adheres to the voluntary Code of Good Conduct in matters of housing loan pre-contract information and delivers personalised and detailed advice. 22

25 BCEE A TRUSTWORTHY PARTNER FOR YOUR HOUSING LOAN

26 APPENDIX

27 Appendix I : Your personal financing plan Your personal financing plan relates the expenses connected with your investment to all of your resources. It gives you a first estimate of the amount you may be able to borrow and helps you in preparing your appointment with one of our advisors. All you have to do is, fill in the relevant data relating to your project and your personal situation. Our advisors will guide you through your financing plan and give you a more specific estimate of your financing possibilities. Costs related to your project Personal contribution Acquisition or construction costs Cost of land Landscaping costs Possible renovation costs Acquisition deed and registration fees Mortgage deed fees Architect s fees Building permit fees Utilities connection fees Credit life insurance premium Fitted kitchen Miscellaneous Total costs (T1) Own funds* Net revenue from sale of property * Housing savings scheme * Donations to receive * State aids and grants VAT discount Total personal means (T2) T1-T2 = Amount to be loaned Monthly income Monthly expenses + Net monthly income + Monthly income from rent payments + Monthly income from securities + Family allowances + Other monthly income Total monthly income (T3) - Existing loans - Housing savings scheme - Supports and other permanent expenses - Monthly instalments of new loan to be taken out Total monthly expenses (T4) Available income = T3-T4 Ratio Expenses / Income = T4 / T3 * available immediately

28 Appendix II : Interest rates and monthly instalments Simulation of monthly housing loan payments The table below helps you to simulate the monthly payments on your loan according to various interest rates. To calculate your theoretical instalments, divide the amount you want to borrow by 1,000 then multiply the result by the coefficient that corresponds to your combination of the loan duration and the interest rate % 2.00 % 2.25 % 2.50 % 2.75 % 3.00 % 3.25 % 3.50 % 3.75 % 4.00 % 4.25 % 4.50 % 10 years years years years years Example : borrowed amount of EUR 400,000 for 25 years and a 3.00 % rate. Instalments : 400 x 4.76 = EUR 1,904

29 Appendix III : BCEE branch network BCEE s network counts 14 finance centres and their affiliated branches. Branch Address Phone Finance Centre Auchan Rue Alphonse Weicker, 2 L-2721 Luxembourg B.E.I. Bd. Konrad Adenauer, 100 L-2950 Luxembourg Centre Européen Tour B - Av. J.F. Kennedy, 11 L-1855 Luxembourg Cents Bd. Simonis, 2A L-2539 Luxembourg Cour de Justice Bd. Charles Léon Hammes L-1715 Luxembourg John F. Kennedy Avenue J.-F. Kennedy, 39 L-1855 Luxembourg Monnet Rue Alcide de Gasperi, 3 L-1615 Luxembourg Niederanven Route de Trèves, 177 L-6940 Niederanven Sandweiler Rue Principale, 41 L-5241 Sandweiler Finance Centre Bascharage Av. de Luxembourg, 135 L-4940 Bascharage Differdange Rue J.-F. Kennedy, 54 L-4599 Differdange Niedercorn Rue des Ecoles, 4 L-4551 Differdange Pétange Route de Luxembourg, 24 L-4760 Pétange Rodange Route de Luxembourg, 1 L-4833 Rodange Finance Centre Diekirch Rue de Stavelot, 4 L-9280 Diekirch Larochette Place Bleech, 25 L-7610 Larochette Vianden Grand-Rue, 18 L-9410 Vianden Finance Centre Dudelange Pl. de l'hôtel de Ville, L-3590 Dudelange Bettembourg Route d'esch, 31 L-3230 Bettembourg Kayl Grand-Rue, 31 L-3650 Kayl Réiserbann Rue de Geespelt, 12 L-3378 Livange Rumelange Place G.-D. Charlotte, 4 L-3710 Rumelange Finance Centre Echternach Place du Marché, 20 L-6460 Echternach Beaufort Rue Kummel, 1 L-6310 Beaufort Junglinster Route de Luxembourg, 8 L-6130 Junglinster Finance Centre Esch/Alzette Place de l'hôtel de Ville, 3 L-4138 Esch/Alzette Belval Plaza Avenue du Rock'n Roll, 7 L-4361 Esch/Alzette Belvaux Route d'esch, 33 L-4450 Belvaux Esch/Lallange Rue de Luxembourg, 136 L-4221 Esch/Alzette Esch/Nord Place Benelux, 5 L-4027 Esch/Alzette Mondercange Rue d'esch, 5 L-3920 Mondercange Schifflange Avenue de la Libération, 3-5 L-3850 Schifflange Finance Centre Ettelbruck Rue Abbé Henri Muller, 13 L-9065 Ettelbruck Colmar-Berg Avenue Gordon Smith, 42 L-7740 Colmar-Berg Redange/Attert Grand-Rue, 76 L-8510 Redange/Attert

30 Finance Centre Gasperich Route d'esch, 259 L-1471 Luxembourg Bonnevoie Rue de Bonnevoie, 111 L-1261 Luxembourg Cloche d'or Rue Guillaume Kroll, 12 L-1882 Luxembourg Hesperange Route de Thionville, 450 L-5886 Hesperange Hollerich Route d'esch, 125 L-1471 Luxembourg Howald Route de Thionville, 201 L-5885 Howald Finance Centre Grevenmacher Rue Mathias Schou, 1 L-6762 Grevenmacher Mondorf-les-Bains Avenue François Clement, 62 L-5612 Mondorf-les-Bains Remich Place du Marché, 2 L-5555 Remich Wasserbillig Grand-Rue, 15 L-6630 Wasserbillig Wormeldange Rue Principale, 67 L-5480 Wormeldange Finance Centre Mamer Rue de la Libération, 3 L-8245 Mamer Bertrange Rue de Leudelange, 5 L-8079 Bertrange Belle Etoile Shopping Center la Belle Etoile L-8050 Bertrange route d Arlon Bertrange-Concorde Route de Longwy, 80 L-8080 Bertrange Capellen/NSPA Rue de la Gare, 11 L-8325 Capellen Steinfort Route de Luxembourg, 2 L-8440 Steinfort Strassen Route d'arlon, 189 L-8011 Strassen Finance Centre Niederwiltz Avenue de la Gare, L-9540 Wiltz Pommerloch Route de Bastogne, 19 L-9638 Pommerlach Rombach-Martelange Route d'arlon, 2 L-8832 Rombach-Martelange Finance Centre Place de Metz Place de Metz, 2 L-2954 Luxembourg Avenue du X Septembre Avenue du X Septembre, 14 L-2550 Luxembourg Centre Rue Aldringen, 17 / Rue Beck, 7 L-1118 Luxembourg Gare Coin Av. de la Liberté / Av. de la Gare L-1931 Luxembourg Knuedler Coin Pl. Guillaume II / Rue de la Reine L-1648 Luxembourg Limpertsberg Allée Scheffer, 33 L-2520 Luxembourg Merl/Belair Bld. Pierre Dupong, 4-6 L-1430 Luxembourg Finance Centre Walferdange Route de Diekirch, 13 L-7220 Walferdange Bridel Route de Luxembourg, 78 L-8140 Bridel Lintgen Route de Diekirch, 8A L-7440 Lintgen Mersch Centre Marisca / Rue G.-D. Charlotte L-7560 Mersch Finance Centre Weiswampach/ Wemperhardt Op der Haart, 24 L-9999 Wemperhardt Clervaux Grand-Rue, 16 L-9710 Clervaux Hosingen Rue de la Croix, 12 L-9807 Hosingen Troisvierges Grand-Rue, 25 L-9905 Troisvierges Online Branch [email protected] Skype : BCEE Agence Online

31 Note IV : Useful addresses Fonds du Logement 74, Mühlenweg L-2155 Luxembourg Tel.: (+352) Services des Aides au Logement 11, rue de Hollerich L-1741 Luxembourg Tel.: (+352) Société Nationale des Habitations à Bon Marché 2b, rue Kalchesbruck L-1852 Luxembourg Tel.: (+352) Ministère de la Culture Service des Sites et Monuments Nationaux 26, rue Münster L-2160 Luxembourg Tel.: (+352) Ministère du Développement durable et des Infrastructures 4, Place de l Europe L-1499 Luxembourg Tel.: (+352) Ministère de l Intérieur 19, rue Beaumont L-1219 Luxembourg Tel.: (+352) Ministère de l Agriculture, de la Viticulture et de la Protection des Consommateurs 1, rue de la Congrégation L-1352 Luxembourg Tel.: (+352) Administration de l Enregistrement et des Domaines 1-3, avenue Guillaume L-1651 Luxembourg Tel.: (+352) Administration du Cadastre et de la Topographie 54, avenue Gaston Diderich L-1420 Luxembourg Tel.: (+352) etika Initiativ fir Alternativ Finanzéierung asbl 55, avenue de la Liberté L-1931 Luxembourg Tel./Fax : (+352) [email protected] Ordre des Architectes et des Ingénieurs-Conseils 6, boulevard Grande-Duchesse Charlotte L-1330 Luxembourg Tel.: (+352) Chambre des Métiers 2, circuit de la Foire Internationale L-1347 Luxembourg Tel.: (+352) Fédération des Artisans 2, circuit de la Foire Internationale L-1347 Luxembourg Tel.: (+352) My Energy 28, rue Michel Rodange L-2430 Luxembourg Tel.: (+352)

32 EUROPEAN AGREEMENT ON A VOLUNTARY CODE OF CONDUCT ON PRE-CONTRACTUAL INFORMATION FOR HOME LOANS (HEREUNDER AGREEMENT ) This Agreement was negotiated and adopted by European consumer associations and European associations of credit institutions offering home loans. It provides backing for the Voluntary Code of Conduct (hereunder the Code ) to be implemented by all institutions offering home loans to consumers. The Agreement consists of two parts : Part I : Terms of implementation and monitoring of the Code ; Part II : Code stipulations in terms of information to be provided to consumers, namely : - general information on the offered home loans ; - at the pre-contractual stage, personalised information in the form of the European Standardised Information Sheet. Field of application of the Code The Code covers consumer information for domestic and cross-border home loans. Definition of a Home Loan for the purposes of the Code A home loan is a credit to a consumer for the purchase or transformation of a private real estate asset he owns or aims to acquire. Such credit is guaranteed either by a mortgage on an immovable property or by a surety commonly used for this intent in a Member State. Home loans covered by Directive 87/102/CEE on consumer credits do not come under the scope of the Code. The aim of the Code is to ensure transparency and comparability of information. PART I : TERMS OF IMPLEMENTATION The Code shall be implemented by means of the following procedure : 1. European credit associations adhering to the Code shall make an official public statement announcing their commitment. 2. Each of these associations shall forward to its national member institutions an official invitation to the following : 2.1. make an official public statement announcing their adherence to the Code ; 2.2. take all necessary measures to ensure effective application of the Code, which applies in particular to : announce their adherence to the Code within six months from ratification of the Agreement ; make their adherence known to the public ; notify the central register (see point 7.2) of their commitment to apply the Code, as well as the date selected for implementation. The date of implementation is to be set no later than twelve months from the notification date of the implementation commitment. 3. The Code shall be published and copies shall be made available in each of the branches of the institutions adhering thereto. 4. These copies shall always state the name, address and telephone number of the competent body whom consumers may refer to in case of dispute in application of the Code. 5. Consumers shall be informed of the existence of the Code and of the possibility to obtain a copy thereof by means of a specific note in the European Standardised Information Sheet. 6. European credit associations shall publish an annual progress report on the Code implementation. 7. The European Commission has stated that it shall : 7.1. monitor implementation of the Code and effectiveness thereof ; 7.2. ensure the setting-up of a central register listing institutions that offer home loans and those among them where the Code is adopted ; 7.3. issue a recommendation that will include the Code as provided for by document COM (1999)232 of ; 7.4. assess the success of the Code on the basis of monitoring results, annual reports submitted by European credit associations and any other available information within two years from the date of issue of this recommendation. Immediately thereafter, and under the auspices of the European Commission, the Code shall be revised by all participating parties on the basis of the Commission's review findings. 8. Adherence to the Code shall also be open to institutions who are not members of European Credit Associations having adopted it.

33 PARTIE II : VOLUNTARY CODE OF CONDUCT ON PRE-CONTRACTUAL INFORMATION FOR HOME LOANS This document is a voluntary Code of conduct (hereunder the Code ), which deals with pre-contractual information to be provided to consumers regarding home loans. This Code is the core of the European Agreement on a Voluntary Code of Conduct on Pre-contractual Information for Home Loans (as defined in the Agreement), negotiated and approved by the European Consumer Associations and the European Credit Associations. Institutions that adhere to the Code undertake to provide to the consumer, in accordance with the agreed terms of implementation and in the form described below : - General information about home loans available ; - At the pre-contractual stage, personalised information to be presented in a European Standardised Information Sheet. The final decision to accept a credit offer from a lender rests with the consumer. 1. General information to be given to consumers Initial information about home loans should include or be accompanied with the following information, all presented in the same format: A - Lender : 1. Identification and address of lender ; 2. Where appropriate, identification and address of intermediary. B - Home Loan : 1. Purposes for which the home loan may be used ; 2. Form of surety ; 3. Description of home loan types available with a brief description of the differences between fixed and variable rate products, including related implications for consumers ; 4. Interest rate types fixed, variable, and combinations thereof ; 5. An indication of the cost of a typical home loan for the consumer ; 6. List of related cost elements (administrative costs, legal costs, insurance costs, intermediaries costs...) ; 7. Options available for reimbursing the credit to the lender (including the number, frequency, amount of repayment instalments if any) ; 8. Possibility of early repayment (if so, conditions thereof) ; 9. Possible requirement to have real estate asset valuated by an expert (if so, which one) ; 10. General information on tax reliefs on home loans or other public subsidies prevailing ; alternatively indication of where to refer to for further information ; 11. Where relevant duration of the reflexion period ; 12. Confirmation that the institution adheres to the Code and indication that a copy of the Code is available in the institution. 2. Information to be presented on the European Standardised Information Sheet The content of the European Standardised Information Sheet appears opposite : Banque et Caisse d'epargne de l'etat, Luxembourg Etablissement Public Autonome Siège Central : 1, Place de Metz L-2954 Luxembourg BIC : BCEELULL R.C.S. Luxembourg B tél. (+352)

34 EUROPEAN STANDARDISED INFORMATION SHEET The standardised information hereunder is an integral part of the European Agreement on a "Voluntary Code of Conduct on Pre-contractual Information for Home Loans", a copy of which can be obtained from your lender. Item Description Upfront text This document does not constitute a legally binding offer. The figures are provided in good faith to give an accurate representation of the offer that the lender would make under current market conditions based on the information that has been provided. The provision of this information does not oblige the lender to grant a credit. 1 Lender 2 Description of product This section is aimed at providing a concise but clear description of the product. It should be made clear: - whether the surety consists of a mortgage on a real estate asset or another commonly used surety ; - whether this is an interest home loan (which implies only servicing the debt with a lump sum repayment on due date) or a repayment home loan (which implies payment of interest and capital over the whole duration of the loan) ; - whether the home loan conditions depend on the contribution of a certain amount of capital by the consumer (this capital may be expressed as a percentage of the real estate asset value) ; - whether the home loan conditions depend on a third party guarantee. 3 Nominal interest rate (indicate rate type and duration of fixed period) This section aims at providing information on the key condition of the home loan, the interest rate. Where relevant it should include the variability mode (frequency of revisions, lock periods and related penalty clauses, collars and caps...). In case of variable interest rate loan, the following is to be specified : - whether rates are tied to an index ; and - if so, which index mechanism will be applied. 4 Annual Percentage Rate of Charges (APR) based on national legislation or, where appropriate, effective rate Where the national legislation does not provide for an APR, the equivalent effective rate should be used. 5 Amount of granted credit and currency 6 Duration of home loan agreement 7 Number and frequency of instalments (may vary) 8 In case of a home loan with principal amortisation, amount of each instalment (may vary)

35 9 For interest only home loans : - amount of each interest repayment - amount of each instalment to the repayment vehicle The lender is to provide a real or illustrative indication of the following : a) amount of interest repayments according to the frequency thereof (see point 7) ; b) amount of instalments towards the repayment vehicle according to the frequency thereof (see point 7). Where appropriate, a warning is to indicate that the repayment vehicle may not cover the amount borrowed. If the lender provides the repayment vehicle and includes it in his offer, a specific note is to indicate clearly whether it is subject or not to approval of such a repayment vehicle by the consumer. 10 Where appropriate, additional non-recurring expenses A list of initial non-recurring expenses to be paid upon subscription to the home loan is to be provided to consumers. Where such expenses depend directly or indirectly on the lender, an estimate is to be given. Where appropriate, it should be indicated whether these expenses are to be paid irrespectively of the outcome of the home loan application. These may include : - administrative expenses ; - legal fees ; - property valuation fees. There should be a clear indication where an offer is subject to the above services being provided to the consumer by the lender (subject to provision for such under the local legislation). 11 Additional recurring expenses (not included under point 8) The list of additional recurring expenses is to include for instance : - insurance against default on payment (in case of unemployment/death) ; - fire insurance ; - insurance on real estate and movables. There should be a clear indication where an offer is subject to the above services being provided to the consumer by the lender (subject to provision for such under the local legislation). 12 Early repayment The lender is to indicate : - the possibility and terms of early repayment ; - including an indication of any charges applicable. If the exact amount of these fees cannot be determined at this early stage, the consumer is to be notified that he will be charged an amount sufficient to cover the lender's costs in unwinding the transaction. 13 Internal appeal provision Name, address and telephone number of the contact person. 14 Illustrative amortisation table The lender is to provide, for illustrative purposes, a summary amortisation table that would include at least the following : - the amount of monthly or quarterly (where appropriate) instalments for the first year ; - followed by the annual amounts for the total duration of the loan. The table is to indicate the following : - amount of capital reimbursed ; - amount of interest ; - amount of outstanding capital ; - amount of each instalment ; - sum capital and interest. It should be noted that such a table is for information purposes only. If the offered home loan is at a variable rate, a warning should be included. 15 Obligation to domicile one's bank account and salary with the lender

36 Banque et Caisse d Epargne de l Etat, Luxembourg Etablissement Public Autonome Siège Central : 1, Place de Metz L-2954 Luxembourg BIC : BCEELULL R.C.S. Luxembourg B tél. (+352) /15/pdf