The Mortgage Lending Regulations in Europe are designed to protect consumers and ensure responsible lending practices. These regulations set out guidelines for loan affordability assessments, credit risk evaluation, and borrower protection mechanisms. They aim to reduce market speculation, foreclosure risks, and irresponsible lending that could lead to financial instability.
Financial institutions must ensure that borrowers can meet their repayment obligations without excessive financial strain. Mortgage lenders are required to comply with standardized creditworthiness assessment models, adhere to loan-to-value (LTV) limits, and provide greater transparency in mortgage contract terms.
