By Geert Van Kerckhoven, CEO of Oper
2025 was a decisive year for the European mortgage industry. Following the sharp interest-rate shock of 2022-2023, last year signalled the overall recovery of the mortgage market across the continent. Data from the European Mortgage Federation suggests that 2025 saw renewed lending growth and improving borrower confidence. Despite an ongoing affordability crisis, which has stretched many household finances, activity picked up across Europe as interest rates eased, economic sentiment strengthened, and housing demand recovered.
European mortgages are clearly shifting, and banks are often struggling to keep up. While many institutions across Europe have committed themselves to the digital transformation of their offerings, this has often been restricted to front-office operations, such as AI chatbots, affordability calculators, and ID verification. Meanwhile, the growth of neobanks and their move into mortgage services is putting traditional mortgage providers under pressure, as are the demands of the digital native generation now entering the market.
Having an app or AI-powered customer service is no longer enough. Digitalisation must go beyond the obvious touchpoints, and be fully integrated into the decision core of the mortgage business – underwriting, documentation, and policy interpretation – to meet growing consumer demand and the changing banking landscape.
Research has shown that the most significant drop off in digitalisation of the mortgage process occurs between document upload and credit decision. While the process is frequently digitalised at the edges, the core work remains manual and fragmented. Underwriters spend much of their time analysing documents, performing policy checks, and collecting missing information through lengthy email chains. This leads to overwhelming backlogs; in Germany, for example, the vast majority of lenders take over a week to reach a final decision on a mortgage application, and a third take over two weeks to give applicants their answer.
At a time when the European mortgage market is quickly recovering, and the desire for home ownership shows no signs of slowing down, integrating efficient technology every step of the way is now a necessity for lenders. Specialised AI, integrated into back-office functions, is a key component here. Implementing an AI tool to help underwriters clear backlogs created by manual tasks and assisting them in making informed, auditable decisions in complex cases, can be a decisive competitive advantage for lenders across Europe. Use cases show that effective AI implementation can automate routine steps by up to 90%, improving time to decision by around 81%, leading to a more efficient mortgage process for both borrower and lender.
Nevertheless, human oversight must remain central to the mortgage process. Most borrowers still prefer to have a point of human contact while applying for their mortgage. While document automation and workflow tools certainly help to scale tasks, they cannot replace human judgement. Instead, integrated, specialised AI can allow advisors to focus on servicing customers rather than completing paperwork.
This becomes especially important in more complex cases, such as non-standard income patterns. By automating more routine checks, document validation, and data extraction, AI tools allow advisors to dedicate themselves to addressing nuanced financial circumstances, and applying their expertise to guide borrowers through bespoke solutions.
As the European mortgage industry continues to develop to meet changing demands, scaling from digital to intelligent tech is slowly becoming the new operational baseline. Integrating well-governed AI into back-office functions will help lenders transform documents into reliable data, support underwriters with complex cases, and unlock the capacities needed to deliver faster, more consistent decisions. Lenders that integrate purpose-built AI into their operations will be the ones who stay ahead of the curve and define the future of mortgages across the continent for years to come.
