Housing Affordability: mortgages for older borrowers

The European Mortgage Federation (EMF) published a comprehensive Quarterly Review (Q4 2025) analysing mortgage and housing markets across 27 EU countries and the United Kingdom. The review was authored by Luca Bertalot, Jennifer Johnson, Eva Dervaux and Richard Kemmish, senior researchers at the EMF, with support from the organisation’s publishing team. It integrates data from national central banks, statistical agencies and the EMF’s own mortgage database, offering a pan‑European perspective on affordability, senior‑borrower products and market dynamics.

Across the region, total outstanding residential mortgage lending continued to rise, reaching approximately €1.93 trillion, a modest increase over the previous quarter. New mortgage issuance grew by about 3.8 % in volume and 16.4 % in value, driven largely by first‑time buyers and refinancing activity. Variable‑rate loans dominate the market, accounting for around 95 % of outstanding mortgages, while short‑term fixed‑rate products remain a small share. Interest‑rate spreads have narrowed, with weighted‑average rates falling to 3.6–3.9 % in many countries, reflecting central‑bank policy cuts in the second half of 2025.

Housing construction activity showed mixed signals. While some markets, such as Norway and the Netherlands, recorded increased building permits and completions, others, notably Spain and Italy, faced constrained new‑build supply. Overall, house‑price indices rose by 5–12 % year‑on‑year, with the strongest gains in the Nordic region (e.g., Stavanger + 18 % y‑o‑y) and the Baltic states. Apartment markets experienced higher price growth in urban centres, reflecting limited rental supply and strong demand from younger households.

The review highlighted the growing importance of mortgage solutions for older households. Reverse mortgages, lifetime mortgages and equity‑release schemes are available in several jurisdictions, notably the United Kingdom, Ireland, Finland and the Netherlands. Age limits for new mortgages typically range from 65 to 75 years at loan maturity, with some countries allowing extensions up to 80 years. Product uptake remains modest; for example, reverse‑mortgage contracts in Spain numbered only 366 in the first nine months of 2025. Policy discussions are ongoing in many states to adapt underwriting criteria, capital requirements and consumer‑protection rules to the ageing population.

Regulators across Europe have adjusted macro‑prudential tools to balance financial stability with housing affordability. The European Central Bank’s bank‑lending survey indicated continued demand for mortgage credit, prompting some national authorities to raise loan‑to‑value (LTV) caps (e.g., Norway’s increase to 90 %). Several countries introduced targeted subsidies for first‑time buyers, such as Ireland’s €10 000 grant spread over ten years and the Netherlands’ senior‑mortgage product with no maximum age limit. Consumer‑protection frameworks for complex products, especially reverse mortgages, have been reinforced in the United Kingdom, France and Finland through specific advisory qualifications and disclosure duties.

Sustainability features prominently in the review’s analysis. Energy‑efficient retrofits and new‑build standards are increasingly linked to mortgage eligibility. In the Netherlands, the “senior mortgage” product supports age‑appropriate, low‑energy dwellings, while Finland’s reverse‑mortgage scheme includes tax incentives for energy‑saving upgrades. The EMF notes that green‑mortgage incentives, such as reduced interest margins for certified‑efficient homes, are expanding but remain uneven across the region. Housing‑affordability policies are also being aligned with climate goals, encouraging the renovation of existing stock rather than new construction where possible.

The EMF projects a gradual continuation of mortgage market recovery, contingent on interest‑rate trajectories and economic stability. Expected policy measures include further relaxation of LTV limits in select markets, expansion of senior‑friendly products, and increased integration of sustainability criteria into lending standards. However, risks persist from rising construction costs, potential inflationary pressures and demographic shifts that could strain affordability for younger households while increasing demand for equity‑release solutions among older borrowers.