Technical FAQ on CSSF Regulation No 20-08 on borrower-based measures for residential real estate credit (track changes) (Updated)

Key dates

December 3, 2020

- CSSF Regulation No 20-08 originally published

January 1, 2021

- Regulation and LTV limits became effective for residential real estate credit on Luxembourg territory

May 21, 2024

- CSSF Regulation No 24-04 introduced temporary adjustments to LTV limits

December 30, 2024

- CSSF Regulation No 24-10 extended temporary adjustments

January 7, 2025

- Most recent Technical FAQ version published (prior to March 9, 2026 update)

June 30, 2025 Deadline

- **CRITICAL DEADLINE**: Temporary portfolio allowance for buy-to-let loans (95% LTV for 10% of annual production) expires; all buy-to-let loans revert to 80% LTV limit

Suggested considerations

• *For all lenders:
• *Verify LTV compliance calculations for all new residential mortgage originations using the framework specified in the FAQ, ensuring own funds are calculated as actual equity contributions from borrowers
• *Implement dual LTV tracking for borrowers financing new property through sale of existing property, ensuring compliance with both interim and final LTV ratios
• *Document own funds sources carefully, particularly when cash collateral or sale proceeds are used, as these are only permitted for loans with initial LTV below 100%
• *Prepare for June 30, 2025 transition by:
• Identifying all buy-to-let loans currently benefiting from the 95% LTV exemption

What changed

• The most recent update (March 9, 2026) to the Technical FAQ reflects the regulatory framework established by CSSF Regulation No 20-08 (as modified by Regulation No 24-10). The core LTV requirements are: Primary Residence Loans:
• First-time buyers: LTV limit of up to 100%
• Other buyers: LTV limit of 90%, implemented via portfolio allowance Buy-to-Let Residential Loans:
• Standard LTV limit of 80%
• Temporary exemption (until June 30, 2025): Lenders may apply LTV ratios up to 95% for up to 10% of annual production Other Residential Real Estate Loans:
• LTV limit of 80% Own Funds Calculation: The regulation requires borrowers to satisfy specific own funds requirements. Own funds must consist of actual equity contributions from the borrower and can include cash collateral and proceeds from sale of e

Who is affected

• Credit institutions and mortgage lenders
• Private borrowers
• Buy-to-let investors

Related regulations

• *Regulatory Framework
• *Industry Context
• *Scope Clarification
• use portfolios.