Purchase of a main residence
Find out whether the interest you pay on your main home is fully deductible or capped.
Mortgage insurance
How much can I deduct for my outstanding balance insurance?
One-off payment
€
If you make a one-off payment, you benefit from a higher deductible limit.
Annual payment
€
For annual payments, the basic maximum amount (insurances and interests on personal loans) applies (672 x number of people in the household).
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Simulator – Outstanding balance insurance: calculate your tax deduction limit
Have you taken out mortgage insurance in Luxembourg or are you considering doing so?
Our outstanding balance insurance simulator allows you to calculate the maximum tax deduction applicable to your policy, based on your family situation, the type of policy you have chosen (single premium or annual premium) and your age.
Why use this outstanding balance insurance simulator?
- find out the amounts you can deduct from your taxable income in Luxembourg,
- make the right choice between a single premium or an annual premium,
- optimise the tax treatment of your outstanding balance insurance,
- anticipate the tax impact of your contract on your Luxembourg tax return.
What deduction is available for life and mortgage insurance?
Life insurance premiums, including those related to a mortgage (and paid annually), as well as interest on a personal loan, are tax deductible up to a limit of 672€ per year per person. This limit may be increased depending on the composition of your household:
- €672 for the taxpayer,
- +€672 for spouse or partner (in the case of joint taxation),
- +€672 for each dependent child.
For example, a family with two children can deduct up to 2.688€ per year.
Deduction of outstanding balance insurance in the case of a single premium
If you take out outstanding balance insurance with a single premium to cover a mortgage, the deduction limit is significantly increased:
- Up to €6,000 per taxpayer,
- +1.200€ per child,
- up to the limit of the actual amount of the single premium paid.
This rule applies only to contracts intended to cover the outstanding balance of a mortgage loan for your main residency and not to personal loans (e.g. for a car).
Increase in the ceiling for insured persons over 30 years of age
If the policyholder is over 30 years of age at the time of taking out the policy, the ceiling may be increased by 8% per year of age over 30, up to a maximum of 160%.
Again, only the actual costs of the single premium are taken into account for this increase.
Frequently asked questions:
What is outstanding balance insurance?
This is a death insurance policy designed to guarantee repayment of a loan (usually a mortgage) in the event of the borrower's death.
Are traditional life insurance policies also affected?
No. The specific deduction explained here applies to loan-related contracts and not to savings or investment insurance policies.
Is it mandatory to have outstanding balance insurance?
No, but it is strongly recommended by banks to secure a mortgage loan, and it offers significant tax benefits and protection for your family.
Can I combine the annual bonus and the one-off bonus?
Yes, but the deduction rules differ. The simulator helps you determine what is most advantageous based on your profile. It is best to contact our team if you would like a quote for residual debt insurance.
Optimise the tax treatment of your mortgage insurance with our outstanding balance simulator.
Calculate your tax deduction limit in just a few clicks and prepare your tax return with peace of mind.
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