The time it takes to pay off a mortgage is dependent upon three factors: the size of the mortgage, the size of the monthly payments and the interest rate. We gathered data on these three metrics for 18 European countries from sources including Eurostat and the Organisation for Economic Co-operation and Development (OECD), in order to get an idea of how long it takes households in each of these countries to pay down a mortgage and own a home outright.
Years to Pay Down a Mortgage in European Countries
It would take the average European household 14.7 years to repay the mortgage on a 100 square metre home, assuming they allocate all extra money each year towards mortgage repayment. Households in Belgium would own their homes in the shortest amount of time—just 6.7 years—due to a combination of lower home prices per square metre and higher levels of income remaining after other living expenses are paid. Typical households in Belgium, Finland, the Netherlands, Germany and Slovakia could own homes outright in under ten years.
In the chart below you can see how quickly or slowly a mortgage for our typical household would decline over time, given average home prices per square metre, income, spending and interest rate levels in each country. For example, those in Belgium (indicated by lime green) can own a home the quickest despite not having the cheapest real estate, due to the ability to make higher monthly payments. Compare this to Greece or Latvia, where real estate prices are cheaper but it takes longer to repay a mortgage since households have less disposable income for mortgage payments after household expenses are paid.
How much a family can afford in mortgage payments is a function of both their income and their spending on other household expenses like food, transport, utilities, clothing, etc. Households in Luxembourg, Sweden and Finland typically have the most cash leftover after paying for other living expenses to put towards a mortgage. Those in Greece, Latvia and Estonia have the least.
However, the amount of extra money a household has each month does not necessarily indicate how quickly they can repay their mortgages, as house prices vary considerably from one country to another.
|Country||Number of People per Household||Disposable Net Income, per household||Household Spending (ex. rent & mortgage payments)||Annual Income Available for Mortgage Payments, per household||Monthly Income Available for Mortgage Payments, per household|
|Greece||2.3||€ 22,928||€ 18,860||€ 4,068||€ 339|
|Latvia||2.3||€ 17,234||€ 11,500||€ 5,734||€ 478|
|Estonia||2.1||€ 21,007||€ 12,600||€ 8,407||€ 701|
|Portugal||2.5||€ 29,772||€ 20,000||€ 9,772||€ 814|
|Slovenia||2.3||€ 27,145||€ 17,020||€ 10,125||€ 844|
|Slovakia||2.7||€ 26,368||€ 15,120||€ 11,248||€ 937|
|Spain||2.5||€ 37,078||€ 23,000||€ 14,078||€ 1,173|
|Italy||2.3||€ 41,738||€ 25,530||€ 16,208||€ 1,351|
|Ireland||2.7||€ 54,709||€ 30,240||€ 24,469||€ 2,039|
|United Kingdom||2.3||€ 51,535||€ 25,990||€ 25,545||€ 2,129|
|Netherlands||2.2||€ 50,060||€ 23,980||€ 26,080||€ 2,173|
|Austria||2.2||€ 55,872||€ 29,700||€ 26,172||€ 2,181|
|Germany||2||€ 50,759||€ 22,600||€ 28,159||€ 2,347|
|Belgium||2.3||€ 53,856||€ 24,610||€ 29,246||€ 2,437|
|France||2.2||€ 53,128||€ 23,540||€ 29,588||€ 2,466|
|Finland||2.1||€ 54,103||€ 22,260||€ 31,843||€ 2,654|
|Sweden||1.9||€ 53,352||€ 21,280||€ 32,072||€ 2,673|
|Luxembourg||2.3||€ 81,867||€ 42,090||€ 39,777||€ 3,315|
Years to Own a Home Outright
The time it takes to pay down a mortgage is a function of the size of the mortgage, the monthly payments and the interest rate. Our calculation showed that those living in Belgium could own homes outright in the least amount of time: 6.7 years. Finland, Netherlands, Germany and Slovakia are not far behind, with households typically able to pay off their mortgages in under 9 years.
Other households in Europe would spend a considerably longer time paying a mortgage, with households in Latvia and Greece likely paying mortgage interest for 36.1 and 43.6 years, respectively, before they own their homes in full.
|Country||Average Home Price per Sq. Metre||Average Cost of 100 Sq. Metre Home||Monthly Income Available for Mortgage Payments, per household||10Y Mortgage Interest Rate||75% LTV Mortgage Value||Years to Pay Mortgage (100 Sq. Metres)|
|Belgium||€ 2,437||€ 243,678||€ 2,437||2.0%||€ 182,759||6.7|
|Finland||€ 3,214||€ 321,379||€ 2,654||1.9%||€ 241,034||8.2|
|Netherlands||€ 2,568||€ 256,782||€ 2,173||2.8%||€ 192,586||8.3|
|Germany||€ 2,874||€ 287,356||€ 2,347||2.0%||€ 215,517||8.3|
|Slovakia||€ 1,279||€ 127,931||€ 937||1.5%||€ 95,948||9.1|
|Portugal||€ 1,270||€ 127,011||€ 814||1.8%||€ 95,259||10.8|
|Austria||€ 3,333||€ 333,333||€ 2,181||2.2%||€ 250,000||10.8|
|France||€ 3,934||€ 393,448||€ 2,466||1.5%||€ 295,086||10.8|
|Luxembourg||€ 5,218||€ 521,839||€ 3,315||2.0%||€ 391,379||10.9|
|Spain||€ 1,995||€ 199,540||€ 1,173||2.4%||€ 149,655||12.2|
|Ireland||€ 3,322||€ 332,184||€ 2,039||3.2%||€ 249,138||12.4|
|United Kingdom||€ 3,769||€ 376,897||€ 2,129||2.6%||€ 282,672||13.1|
|Sweden||€ 4,587||€ 458,736||€ 2,673||3.2%||€ 344,052||13.1|
|Estonia||€ 1,629||€ 162,874||€ 701||1.4%||€ 122,155||16.3|
|Slovenia||€ 1,760||€ 175,977||€ 844||2.9%||€ 131,983||16.5|
|Italy||€ 3,211||€ 321,149||€ 1,351||2.1%||€ 240,862||17.8|
|Latvia||€ 1,200||€ 120,000||€ 478||5.5%||€ 90,000||36.1|
|Greece||€ 1,113||€ 111,264||€ 339||4.0%||€ 83,448||43.6|
To determine the number of years a typical family would take to pay their mortgage in full, we needed estimates for the average cost of a home, typical mortgage interest rates and the size of monthly payment that a family could likely afford. For comparison sake, we standardized the home size to be 100 square metres and used 10-year mortgage interest rates from Euro Area Statistics. We assumed that households bought their homes with a 25% down payment, and took out a mortgage for the remaining 75%. This is called a 75% loan-to-value (LTV) mortgage.
Calculating the Average Cost of a Home
To find the average cost of a home, we started with data from emoov on the cost of a property in each country per square metre. We then multiplied these values by 100 to get the estimated cost for a 100 square metre home in each country.
Calculating Potential Monthly Mortgage Payments for Each Country
In order to determine how much a typical household can afford for a monthly mortgage payment, we analysed average household income and spending data. To find the average after-tax household income in each country, we started with OECD net adjusted disposable income per capita data. As this OECD data reflects an adjustment for purchasing power parities (PPPs), we reversed this adjustment by applying OECD PPP values for each country. The result was after-tax income per capita in the local currency, in real terms. We then converted this data to Euros, where necessary, using 2017 average fx rates. Finally, we multiplied these income per capita values by the average number of people per household in each country. This gave us real, after-tax income per household in each country, represented in Euros.
Next we calculated how much a typical household spends each year on living expenses, other than rent or mortgage payments. First we gathered data from Eurostat on average household spending per capita for food, transport, utilities, clothing, communications, holidays, etc. We multiplied these costs by the typical household size in each country to get a measure for annual household spending per country.
To determine how much money a typical household has available to put towards a mortgage each year, we subtracted the household spending data from the household income data. We assumed that all extra income would go towards mortgage payments. Diving these amounts by 12 gave us an estimate for the monthly mortgage payment possible for an average household in each country. We then applied a loan payment formula using these monthly payments, the loan value amount and interest rate to determine the number of years needed to pay a mortgage in full in each country.
We included all European countries for which we could find comprehensive data:
- United Kingdom
Regardless of where you live, be sure to invest in a good home insurance policy. For those in the UK, you can learn more about the cost of home insurance in our article, Average Cost of Home Insurance. Even if you're not able to buy your own home yet and are still renting, protect your belongings against calamities like fire, flood and theft with a contents insurance policy—read all you need to know about contents insurance and information on the costs of contents insurance.