The Impact of Covid-19 on European Mortgage Performance – One Year On…



One year following the onset of Coronavirus Disease (COVID-19), it is evident that the worst outcomes for the mortgage and housing market have been avoided thanks to significant government support, the rapid adaptation to restrictions by businesses and consumers, and the implementation of various forbearance measures. At one point in many European jurisdictions, significant portions of mortgage portfolios were on payment holidays. These have been reducing rapidly, and the vast majority of borrowers who came off payment holidays have returned to performing.

-- House prices have remained resilient in most markets', contrary to initial expectations.
-- Borrowers with previous mortgage arrears and restructurings were expected to be more affected by the coronavirus pandemic; however, the performance of restructured portfolios hasn’t been materially worse in most cases compared with pre-pandemic expectations.
-- Hence, we reduced the level of coronavirus-related adjustment to expected house price performance and loans that were previously restructured and/or are reperforming.