Previously seen as a simple technicality, the energy passport has become, since 2024, a central element in the bank’s assessment of real estate projects in Luxembourg. It now influences both the approval of a mortgage and the financial conditions offered to the borrower.
What is the Energy Passport (CPE)?
The CPE (Certificat de Performance Énergétique) is a mandatory document for any sale or rental of a property. It evaluates:
- The overall energy performance class, from A (very efficient) to I (very energy-intensive)
- The thermal insulation quality of the building
Valid for 10 years, the certificate is issued by an accredited expert and must be presented at the latest at the signing of the preliminary sales agreement.
Why has it become strategic for banks?
Following the implementation of European ESG regulations and the green taxonomy, banks in Luxembourg must now assess the environmental impact of the properties they finance. This includes energy efficiency.
The energy passport has become a risk indicator for lenders, just like employment status or debt ratio.
Three main reasons:
- Preservation of value: well-rated properties (A to C) are more attractive for resale, cheaper to maintain, and less exposed to future regulations.
- Devaluation risk: properties rated H or I may lose value or require costly renovations in the short or medium term.
- Sustainability targets: banks must report ESG indicators and prove that they finance a certain percentage of green assets.
How does it affect mortgage conditions?
Since 2024, many banks apply differentiated rates based on the property's energy class:
- Classes A to C: more competitive rates, simplified process, possible perks
- Classes D to G: standard conditions with increased scrutiny
- Classes H and I: financing is more difficult, especially if renovations are required
Some banks may require:
- A detailed renovation plan
- Quotes or a renovation budget included in the mortgage
- A commitment to improve the energy rating within a set timeframe
The interest rate may be increased by 0.20% to 0.40%, or the loan may be refused if the property is considered non-viable without renovation.
What buyers should anticipate
- Request and review the energy passport early
- Estimate renovation costs (heating, insulation, windows, etc.)
- Check with a broker if the property is financeable as-is
- Compare mortgage rates across different scenarios
Can you finance a property rated H or I?
Yes, but the mortgage file must be carefully prepared:
- Include renovation costs in the financing plan
- Provide clear quotes and possibly a renovation timeline
- In some cases, the rate may be adjusted after presenting an improved CPE
At MORTGAGE.LU, we help structure your mortgage file, even for complex renovation projects.
Conclusion
In 2025, the energy passport is as important as your income or personal contribution. It directly affects mortgage approval and the conditions offered by the bank.
In a more regulated and environmentally conscious market, anticipating this factor is key to securing financing. Our team is ready to guide you and optimize your financing based on your property’s energy rating.
