The European Central Bank published a Working Paper using the ECB’s Bank Lending Survey to assess how borrower-based macroprudential measures such as limits on loan-to-value, debt-service-to-income and loan maturities affected mortgage lending standards in 15 euro area countries between 2009-Q1 and 2023-Q3. The paper, which does not represent the ECB’s views, finds that banks generally tighten mortgage credit standards and terms and conditions around the implementation of these measures, with the strongest effects in the quarter of implementation. Empirically, the net percentage of banks reporting a tightening in overall credit standards is around 23 to 25 percentage points higher in the three-quarter window around implementation, while the corresponding increase for overall credit terms and conditions is around 11 to 13 percentage points. Tightening is also visible in reported adjustments to loan-to-value ratios, loan maturities and other loan size limits, and tends to be strongest for policy packages involving loan-to-value limits; legally binding measures appear to have somewhat stronger effects than non-binding recommendations. The tightening is more pronounced when mortgage loan growth or residential real estate price growth is high ahead of implementation and less pronounced under weaker market conditions.
European Central Bank 2026-02-23
European Central Bank working paper finds borrower-based macroprudential tools tighten mortgage credit standards by around 23 to 25 percentage points
The European Central Bank's Working Paper analyzes the impact of borrower-based macroprudential measures on mortgage lending standards in 15 euro area countries from 2009 to 2023. The study finds that banks generally tighten mortgage credit standards and terms around the implementation of these measures, with the strongest effects observed in the implementation quarter. Legally binding measures and high pre-implementation mortgage loan or real estate price growth amplify the tightening effect.