Less than 1 per cent of the massive EU market in mortgages is conducted on a cross-border basis but Ireland's European Commissioner, Charlie McCreevy, has told reporters at the European Parliament that he hopes to increase this figure before his term of office ends in 2009.
"The overall goal is to try and make a real integrated mortgage market throughout Europe," he said yesterday. "It is estimated that you're talking about an overall market in terms of €4 trillion. It's hard for anyone to visualise such a sum."
An expert group has produced a report followed by a green paper, with a white paper due next year.
"Even if you only increase the number by small percentages, say there was 5 per cent of total mortgages that was cross-border, you're still talking of very enormous and large sums, so the savings could be very substantial."
It was "theoretically possible" now for an Irish person to arrange a mortgage in Latvia, for example, but the Internal Market and Services Commissioner warned: "The obstacles put in your way would be quite vast."
He added: "There are different rules applying to everything from deeds, property valuations, enforcements, so all these things mean that the providers don't bother trying to go across borders, so when they don't bother producing a product, it's very difficult for a customer to avail themselves of it."
He dismissed the prospect of universal cross-border dealing in mortgages within 10 or 20 years, "but it should be possible to increase the numbers applying for them".
One thing that had to be dealt with was to ensure that a mortgage-provider would have confidence in the security for a loan based on an asset in another member state. He did not expect to see a "rush" by mortgage-providers over the next five to give out cross-border loans, "but when the rules are broken down there's always niche-players who say, 'we see an opportunity there'."
This would be "good for the consumer" because there would be more competition and the providers would also benefit, "because they have more places to sell their product".
There was also the issue of where the deeds would be held when a mortgage was agreed. "This is one of the questions we will address in the white paper of next year."
As for online mortgages, Mr McCreevy said: "The internet will make it easier for people to be able to access good deals, naturally, but you must remember a provider is not going to lend to a very uncertain or unstable situation, or a situation that they're not familiar with."
He could not foresee a standardisation of property laws throughout the EU, "but we could get over the position of security of the property, the expert groups are looking at various ways to get over difficulties there and be able to give security both to the lender and to the borrower".
He was hopeful of making progress, however limited: "We're going to do a number of things over the coming year or so, so hopefully by the end of my term here in three more years, we might be able to see some progress in this area."
The parliament this week adopted a report by British Conservative MEP John Purvis who said cross-border mortgages would benefit the public but warned that significant obstacles were in the way.
Fine Gael MEP Simon Coveney, who co-authored the report, said: "It is time we removed those barriers which dissuade lenders for selling mortgages in other member states and prevent people from shopping around to find the most competitive mortgage."