European Parliament Adopts New Rules on Mortgages

On 10 December 2013 the European Parliament voted in favour of the final version of the Directive on Credit Agreements relating to Residential Immovable Property (also known as the Mortgage Credit Directive). The objectives of the Directive are to create an efficient and competitive single market for consumers, creditors and credit intermediaries with a high level of consumer protection and to promote financial stability by ensuring that mortgage credit markets operate in a responsible manner.

The new rules aim to ensure that home buyers are informed of the real cost of taking on a mortgage and properly protected against the worst risks and provide for: - Better information, more time to decide, heightened credit worthiness assessment standards. - Business conduct rules including standards for advisory services. - Early repayment of loans as a general right for consumers. - Passport regime for credit intermediaries who will be subject to principles for their authorisation and registration subject to maintaining an appropriate level of knowledge and skills, holding professional indemnity insurance and being of good repute. - High level principles to encourage lenders to apply reasonable forbearance when confronted by consumers in serious payment difficulties. After adoption by the European Council the Directive will be published in the Official Journal and the rules will enter into force. Member States will then have two years to implement the rules into national law. The text approved by the European Parliament is available at