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EU Mortgage Markets
Mortgages are often the most important and longest financial commitment a family makes.
They are essential for access to house ownership (near 70 per cent in the EU) and have great economic importance. In 2009, mortgage credit amounted to €6,126 billion - 52.3 per cent of EU GDP. The market grew from 1998 to 2009 in almost all Member States, though due to the crisis there has been a decline since 2008.
EU markets for retail mortgage credit are fragmented, cross-border activity is rare, although according to the European Central Bank it has doubled between 1997 and 2008, and concentration is increasing.
Significant differences between Member States have not translated into diversity within each country. Product diversity enables financial inclusion and more mature markets offer a wider range to meet consumers' preferences.
Concentration levels are not homogenous (data shows a negative correlation between the size of the market and concentration) but recent information shows concentration has increased such that, on average, the market share of the 5 biggest lenders in each Member State is over 75 per cent.
The price of mortgage credit is the sum of the lenders' profit margin, distribution and management costs, funding costs and those costs arising from risk-taking.