What the winter of 2026–2027 could mean for your budget and borrowing capacity
A mortgage application in Luxembourg is about more than just your salary and the price of the property. The bank looks at your income, existing loans, savings, regular expenses and, more broadly, how much money your household has left once all its expenses have been paid.
In this calculation, the energy consumption of your future home is becoming increasingly important.
And this is no longer just an assumption. In its Bank Lending Survey for the second quarter of 2026, the European Central Bank (ECB) found that euro-area banks had eased their credit standards for buildings with good current or targeted energy performance, while tightening them for buildings that remain persistently energy inefficient.
Over the past twelve months, the reported net effect was -20% for buildings with good or high energy performance, corresponding to an easing of credit standards, compared with +14% for buildings that remain energy inefficient, corresponding to a tightening.
Energy performance is therefore no longer simply a matter of comfort, heating bills or resale value. It is gradually becoming a factor taken into account when assessing credit risk.
For buyers, this changes the way they should look at older properties.
The essentials in 30 seconds ⏱️
In the second quarter of 2026, A-rated homes were listed at an average of €9,049/m², compared with €6,894/m² for G-rated homes, according to listings published on Immotop.lu. That is a difference of €2,155/m².
At the same time, the ECB has found that the current or future energy performance of buildings now influences the criteria applied by banks to mortgage lending.
In Luxembourg, the Energy Performance Certificate (EPC, or Energiepass) is mandatory in many situations involving the sale, rental or construction of a property. It remains valid for 10 years.
Commercial property listings must indicate both the energy performance class and the thermal insulation class.
Klimabonus 2026 can finance a significant part of an energy renovation. For certain insulation works benefiting from temporarily increased amounts, grants can reach up to €140/m², or even €155/m² in certain configurations involving environmentally friendly cladding, before any additional bonus linked to the overall improvement in insulation.
An approval in principle must be obtained before work begins in order to qualify for renovation grants.
And from 1 January 2027, certain investments may benefit from an optional pre-financing scheme, allowing the Klimabonus grant to be deducted directly from the invoice.
How energy performance is becoming a lending issue
The mechanism is fairly simple.
A Luxembourg bank does not only look at how much a household wants to borrow. It also assesses the household’s ability to sustainably meet the monthly repayments.
This includes income, other loans, recurring expenses and the disposable income remaining after the mortgage payment.
Two households can therefore have exactly the same income and buy two properties at the same price, while facing two very different future budgets.
Consider two households, each buying a €500,000 property.
The first is looking at a well-insulated, energy-efficient apartment.
The second chooses an older house that is cheaper per square metre but requires more heating and, potentially, several energy-efficiency improvements.
The purchase price then tells only part of the story.
The bank must also take the borrower’s overall financial situation into account. And ECB data show that European banks are indeed beginning to differentiate between buildings according to their energy performance.
In the second quarter of 2026, banks surveyed by the ECB reported an easing effect on credit standards for buildings with good current or targeted energy performance, while reporting the opposite effect for buildings that remain persistently energy inefficient.
The ECB considers buildings with good or high energy performance to be those rated A to C, either in their current condition or after improvements financed by the loan. Low-performing buildings include, in particular, those rated D to G where no significant improvements are planned.
This distinction is particularly relevant for buyers who want to finance both the purchase and the energy renovation at the same time.
The property market already places a significant value on energy efficiency
This difference can also be seen in asking prices.
According to Immotop.lu, in the second quarter of 2026, A-rated homes were listed at an average of €9,049/m², compared with €6,894/m² for G-rated homes.
That is a difference of:
€9,049 - €6,894 = €2,155/m².
For an 85 m² property, the theoretical difference amounts to:
€2,155 × 85 = €183,175.
For purely illustrative purposes, financing an additional €183,000 over 25 years at approximately 3.5% would represent around €915 more per month, excluding insurance and additional costs.
However, these figures should be interpreted with caution: Immotop data are based on asking prices in property listings, not on the prices actually recorded in notarial deeds.
Nevertheless, they clearly show that the market currently places significant value on energy performance.
In other words, a poorly rated property may be cheaper to buy, but part of that difference may reflect future energy expenses and the investment required to renovate it.
Image credit: © 2026 W.A.C. Group Luxembourg SARL. All rights reserved.
The energy passport: what it really tells you about a property
Many buyers still only discover the EPC when preparing the sale or preliminary sales agreement.
Yet it deserves to be reviewed much earlier.
The Energy Performance Certificate, commonly known as the Energiepass in Luxembourg, allows the energy performance of a building to be compared.
However, the different indicators shown on the certificate should not be confused.
| Indicator | What it measures | Class |
|---|---|---|
| Primary energy demand | Overall energy performance of the building | Energy performance class |
| Heating energy demand | Thermal quality of the building envelope | Thermal insulation class |
| CO₂ emissions | Environmental impact | Environmental performance class |
This distinction becomes particularly important when a buyer is considering renovation work.
For certain Klimabonus bonuses linked to a comprehensive renovation, it is not simply the energy class shown in the listing that matters: the improvement in the thermal insulation class plays a decisive role.
A seller who simply states “class C” without specifying which indicator it refers to is therefore not providing the full picture.
You need to read the EPC.
Another important point: a poor rating does not automatically create an obligation to renovate. The certificate provides information about the building’s performance; obtaining one does not, in itself, mean that the owner must immediately carry out the recommended work.
When is an EPC mandatory?
An EPC is required, in particular, when constructing a new building and in various situations involving existing buildings, including a change of owner or tenant when no valid certificate is already available.
It may also become necessary in certain situations involving alterations to the building or changes to its technical installations.
However, the regulations provide for certain exceptions, including some sales involving properties intended for demolition, inheritances or gifts.
For buyers, the key point is simpler:
before buying, you should be able to review the property’s EPC.
Who issues the EPC and what information is used?
The certificate is issued by an authorised professional, such as an architect, a consulting engineer who is a member of the OAI, or an approved expert.
For an existing building, the expert uses various technical documents relating to the property and also carries out an on-site inspection.
The information that may be requested includes invoices or records of thermal energy consumption for the three years preceding the preparation of the EPC: natural gas, heating oil, district heating, etc.
This is particularly useful information for a prospective buyer.
The EPC provides a standardised estimate of the building’s performance. Historical consumption data, when available, can provide an additional perspective on actual energy costs.
It may therefore be useful to request this information from the seller before making a decision.
The EPC must appear in the property listing
An EPC is valid for 10 years.
When a building already has a valid certificate, there is therefore normally no need to obtain a new one simply because ownership changes.
However, one rule remains relatively unknown among buyers: commercial property listings for sale or rent must indicate:
the energy performance class;
the thermal insulation class.
A listing that provides no information about either of these classes therefore deserves a question before you even arrange a viewing.
For buyers, this simple reflex makes it possible to compare two properties on more than just their price per square metre.
Image credit: © 2026 iService Luxembourg. All rights reserved.
Buying a property to renovate: how can you finance the work?
An energy-intensive property is not necessarily a bad purchase.
It all depends on the purchase price, the cost of the work, the available grants and how the overall project is financed.
There are generally two main options.
1. Include the renovation work in the mortgage financing
Where the bank agrees, the project can be presented as a whole:
purchase + renovation.
The main advantage is financial. The renovation work can then be financed over a longer period as part of the mortgage.
In return, the bank needs a sufficiently detailed understanding of the project. Quotes, a realistic estimate of the work and consistency between the purchase price and the property’s value after renovation therefore become important.
The total amount to be financed also increases, which may affect the loan-to-value ratio and the bank’s assessment of the application.
2. Finance the renovation separately
Another option is to purchase the property and then finance the renovation through a separate loan.
This solution can be more flexible, but a shorter repayment period generally results in a significantly higher monthly payment.
Consider a purely illustrative example.
For €60,000 of renovation work financed over 10 years at a hypothetical rate of 4.64%, the monthly payment would be approximately €625.
The same €60,000 included in financing over 25 years at 3.83% would represent approximately €311 per month.
The difference is therefore around €314 per month.
These calculations are not intended to represent a bank offer. They simply illustrate why the way renovation work is financed can be almost as important as its total cost.
For a household already close to its maximum borrowing capacity, an additional €300 in monthly expenses can make a significant difference.
Image credit: © 2026 Klima-Agence. All rights reserved.
Klimabonus 2026: how much can you receive for an energy renovation?
This is where good preparation can make a significant difference to the budget.
Klimabonus 2026 supports, among other things, sustainable energy renovations of residential buildings more than 10 years old, calculated from the date the building permit was issued.
The new scheme applies to work invoiced between 1 January 2026 and 31 December 2035, subject to compliance with the other applicable deadlines and conditions.
The grants depend in particular on:
the element being renovated;
the insulation material;
the level of performance achieved;
the date on which the application for approval in principle is submitted.
And the amounts have been increased compared with the previous scheme.
What are the Klimabonus 2026 amounts?
For elements of the building envelope in contact with the exterior — including certain external walls, roofs or slabs — the basic amounts may be as follows:
| Type of insulation | Standard III | Standard II | Standard I |
|---|---|---|---|
| Recycled fossil-based / other materials | €35/m² | €45/m² | €60/m² |
| Mineral | €60/m² | €70/m² | €85/m² |
| Environmentally friendly | €90/m² | €100/m² | €115/m² |
However, a temporary measure is particularly attractive in 2026.
For certain works where the application for approval in principle is submitted between 1 January 2026 and 30 June 2027 inclusive, and where the invoice is issued no later than 31 December 2030, the amounts are increased.
They can then reach:
€70/m² for certain recycled fossil-based solutions or other materials meeting Standard I;
€100/m² for mineral insulation meeting Standard I;
€140/m² for environmentally friendly insulation meeting Standard I.
In certain external-wall configurations using environmentally friendly insulation and cladding, the temporary amount can even reach €155/m².
For windows and French windows that meet the scheme’s conditions, the grant can reach €80/m² under the temporarily increased amount.
These amounts show why grants need to be included in the financial assessment of a renovation — but they should never be estimated approximately without checking the project’s exact eligibility.
Up to +50% for improving the insulation class
A second mechanism can significantly increase the amount of support.
When renovation work improves the building’s thermal insulation rating by at least two classes, an additional bonus may be applied depending on the class achieved after renovation:
| Insulation class after renovation | Bonus |
|---|---|
| C | +20 % |
| B | +30 % |
| A or A+ | +50 % |
The work can be carried out progressively.
Eligibility is demonstrated by comparing the Energy Performance Certificates before and after renovation.
This is why a major energy renovation project needs to be properly planned before the first work begins.
Energy advice: up to €2,000 for a house in 2026–2027
For a renovation involving several elements, energy advice provided by an approved adviser is required under Klimabonus.
This service is itself subsidised.
Under the standard scheme, support amounts to:
€1,700 for a single-family house;
€2,000 for a two-unit residential building, plus €60 for each additional apartment, up to a maximum of €3,000.
Here too, however, a temporarily enhanced scheme applies.
Where the advice relates to work for which the application for approval in principle is submitted between 1 January 2026 and 30 June 2027, the grant can reach:
€2,000 for a single-family house;
€2,500 for a two-unit residential building, plus €75 for each additional unit, up to a maximum of €3,750.
Support may also be available for monitoring the work.
The grant can reach €100 per measure, up to a maximum of €400, for checking that quotations comply with the requirements, as well as €250 per measure, up to a maximum of €1,000, for checking that the work carried out on site complies with the requirements.
An important change: some work can be carried out without comprehensive energy advice
Klimabonus 2026 also introduces a simplified procedure.
When a renovation is limited to a single element of the thermal envelope, comprehensive energy advice is not always required.
This may include, in particular:
a roof;
an external wall;
certain slabs;
a wall adjoining an unheated area or the ground;
windows and French windows.
The work must nevertheless comply with the applicable conditions and be carried out by an approved company or accompanied by an energy adviser.
If several elements are to be renovated, comprehensive energy advice is once again required.
For a buyer who simply wants to replace the windows or insulate a roof, this simplification can make the administrative process more accessible.
The rule to remember: obtain approval before starting
This is probably the most important Klimabonus rule.
Work must not begin before the required approval in principle has been obtained.
A homeowner who finds a contractor available at short notice may be tempted to start immediately.
That is precisely what should be avoided.
The renovation must first be structured in accordance with the procedure applicable to the project, after which the application for approval in principle must be submitted to the Guichet unique des aides au logement.
Only once this step has been properly completed should the work begin.
For buyers planning to start renovation immediately after receiving the keys, the administrative timetable should therefore form part of the overall purchase schedule.
What about the grants? The way you plan for them is changing
Under the standard procedure, Klimabonus grants are paid after the investments have been made and the required documents have been submitted.
This means that buyers generally need to be able to finance the renovation before receiving the grant.
But an important change is coming.
From 1 January 2027, an optional pre-financing scheme will be available for certain expenses invoiced from that date onwards.
For certain eligible investments, including insulation work, the grant may be deducted directly from the invoice. The State will then pay the amount to the company registered as an intermediary applicant.
In practical terms, households benefiting from this procedure will no longer necessarily have to advance the full amount of the subsidy before being reimbursed.
This is particularly relevant for households with limited savings remaining after purchasing a property.
Pre-financing will, however, remain subject to specific conditions and will not replace the standard procedure: both systems will coexist.
Image credit: © 2026 Zameen.com. All rights reserved.
Four practical decisions to make before buying an energy-intensive property
1. Ask for the EPC before making an offer
The first step is to determine the exact energy performance class and thermal insulation class.
It may also be useful to request historical energy consumption data where available.
An energy rating provides one indication.
Actual consumption provides another point of comparison.
Together, these two pieces of information provide a better estimate of the property’s cost after purchase.
2. Make sure you are looking at the right rating
The energy performance class and thermal insulation class do not tell exactly the same story.
For a renovation project benefiting from a bonus linked to the building’s overall improvement, the change in the thermal insulation class is particularly important.
Buyers should therefore review the complete EPC rather than simply looking at the letter highlighted in the listing.
3. Get renovation costs estimated before signing
Buying a house for €80,000 less because it requires €100,000 of renovation work is not necessarily a good deal.
Conversely, an energy-intensive property purchased at a sufficient discount and benefiting from substantial grants may prove financially attractive.
The answer depends on the numbers.
A quotation and an energy assessment also allow you to present the bank with a much more structured project.
4. Build a safety margin into the financing
Even with Klimabonus, the project must remain financially viable.
Before 2027, the standard procedure generally requires you to pay the expenses upfront before receiving the grant.
From 2027 onwards, pre-financing may reduce this upfront amount for certain investments, but only where the scheme’s conditions are met.
An expected subsidy should therefore never replace a safety margin in your financing plan.
Frequently asked questions
It can influence how the application is assessed, but it would be an overstatement to say that an energy rating alone determines whether a mortgage is approved or refused.
Nevertheless, ECB data clearly show a shift.
Over the twelve months from the third quarter of 2025 to the second quarter of 2026, euro-area banks reported a net 20% easing effect on their credit standards for buildings with good current or targeted energy performance, compared with a net 14% tightening effect for buildings that remain energy inefficient.
The ECB also specifies that, where no EPC is available, banks may use other information such as the age of the building, energy renovations already carried out or actual energy consumption as indicators.
Energy performance has therefore become a genuine factor in banks’ assessments, although it is not the sole criterion for approval.
Commercial property listings must indicate the energy performance class and thermal insulation class shown on the valid EPC.
An Energy Performance Certificate is valid for 10 years. Its date of issue and validity period are stated directly on the document.
There is no single fixed amount.
The grant depends on the element being renovated, the material used, the level of performance and the project timeline.
For certain insulation works benefiting from the temporarily enhanced scheme applicable to applications for approval in principle submitted by 30 June 2027, the grant can reach €140/m² for certain environmentally friendly insulation materials, or even €155/m² in certain configurations involving cladding, before any additional bonus linked to an improvement in the insulation class.
No.
To qualify for the grant, the required approval in principle must be obtained before work begins.
This step should be factored into the renovation schedule as soon as the property is purchased.
For renovations involving several elements, energy advice remains necessary.
Under the standard procedure, the homeowner finances the expenses and then applies for the grant in accordance with the applicable procedure.
However, from 1 January 2027, certain investments may benefit from an optional pre-financing scheme allowing the grant to be deducted directly from the invoice, subject to the conditions of the scheme.
In summary
Three trends are now telling the same story.
In the second quarter of 2026, A-rated homes were listed on Immotop.lu at an average of €2,155/m² more than G-rated homes.
At the same time, the ECB has found that banks apply relatively more favourable credit standards to buildings with good current or future energy performance, and relatively stricter standards to buildings that remain persistently energy inefficient.
Finally, Klimabonus 2026 strengthens the financial support available for transforming older properties, with temporarily increased amounts for certain projects initiated before 30 June 2027 and a pre-financing scheme due to be introduced from January 2027.
The conclusion, therefore, is not that poorly rated properties should be avoided.
It is more interesting than that:
the purchase price alone is no longer enough to determine which property will actually cost you less.
A cheaper older property can still be an excellent opportunity if the discount covers the necessary renovation work, if the available grants are properly factored in and if the financing is structured from the outset.
Conversely, a property that looks attractive based on its price per square metre can become much less appealing once renovation costs, energy consumption and their impact on the monthly household budget are included in the calculation.
The numbers therefore need to be worked out before making an offer.
Are you considering buying a property that requires renovation? Albalux Crédit can include the cost of the renovation in the assessment of your borrowing capacity and compare the different financing solutions available through its banking partners. Request a free, no-obligation simulation.
Official sources
- Banque centrale européenne (BCE) — The euro area bank lending survey – Second quarter of 2026, 21 juillet 2026.
- Guichet.lu — Aide financière pour la rénovation énergétique d'un logement – Klimabonus 2026, mise à jour août 2026.
- Guichet.lu — Aide financière pour la rénovation énergétique d'un logement sur base d'un conseil en énergie – Klimabonus régime 2026.
- Guichet.lu — Aide financière pour la rénovation énergétique d'un logement sans conseil en énergie se limitant à un seul élément – Klimabonus régime 2026.
- Guichet.lu — Faire établir un certificat de performance énergétique (Energiepass) pour un bâtiment d'habitation.
- Immotop.lu — Property prices in Luxembourg in the second quarter of 2026, 10 juillet 2026.
The monthly repayment simulations presented in this article are based on the constant annuity method, excluding insurance and additional costs. They are provided for illustrative purposes only and do not constitute a financing offer. Klimabonus grant amounts and conditions depend on the nature of the project, the relevant dates and the applicant’s eligibility. They should be confirmed with the Guichet unique des aides au logement or Klima-Agence before any work begins.
