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On the European Commission evaluation of the Mortgage Credit Directive

On the European Commission evaluation of the Mortgage Credit Directive

The European Commission is expected to launch a review of the Mortgage Credit Directive in early September. ESBG members have drafted a pro-active position paper on the topics we believe should be tackled in the review process as they reflect the developments in the EU mortgage market.


>>> Read the position paper


On the requirements for advertising, the mediums have changed a lot since the last review. Innovative new channels for communication with customers have been developed, which make it significantly more challenging to provide potential customers with all necessary information at a single glance. We therefore call on the Commission to allow for simplified information in the advertisement, on the basis that the details will be provided later in the process.

We would also call for streamlined pre-contractual information for consumers, focusing on the total amount of credit, the repayment plan, the default interest rate, and information about the typical consequences for the borrower during the tenor of the contract in case of breaches of obligations. Any information beyond this might overburden consumers.

With regards to foreign currency loans, previous changes to the Commission text have limited the offering of such loans. A small change in the definition, to one or other criteria (instead of both), means that the scope of a foreign currency loan is limited but will allow financial entities to once again offer this type of product. We also call on making the right of withdrawal, and early repayment options, clearer for consumer.