The European Commission has launched a proposal document in the form of a Green Paper aimed at creating a free mortgage market for European homebuyers. It will now consult with all the interested parties, and will focus on increasing competition, transparency, and allowing easy comparison of terms between banks from different member states. Once consultations are complete Brussels will decide at the start of next year whether or not to propose legislative measures to, as the Interior Market Commissioner Charlie McCreevy put it, help people make the biggest purchases of their lives.
The proposals he added would affect a significant part of the entire EU economy, and should reduce costs. “We explore ways in which lenders based in one Member State can assess information on potential borrowers and properties in other Member States. To encourage them to undertake mortgage business across borders, thereby increasing choice in competition in EU mortgage market,” he said. McCreevy insists laws will be tabled only if the advantages outweigh the costs to the industry.
Around 44 percent of the EU’s gross domestic product is tied up in the mortgage loans market, but only one percent of those are cross-border loans. It remains to be seen how Britain, with its mostly floating-rate market with many different conditions, will fit into the picture.