The expansion of financial markets and mortgage debt across European countries over recent decades, is particularly important in providing part of the basis for understanding how European households build up their savings over time.  The development of equity release products, however, provides a further dimension in that they offer one way in which households can dis-save in older age, and although the volume of equity release activity is a small proportion of the total housing loans market (European Mortgage Federation 2007) it nevertheless helps to tie together saving and dis-saving.
The aim of this paper is to seek to explain differences over time and between countries in the levels of mortgage lending.  The analysis will take place using macroeconomic data.  In this way it should provide an understanding of how financial markets and housing markets fit in with the life-cycle model.  The paper begins with a review of the existing literature about such differences in mortgage lending.  Somewhat surprisingly, given the amount of lending, there has been very little research previously undertaken so that this section is short.  The main part of the paper then reports on our econometric analysis of developments in a  number of the older member states.  This establishes the importance, in particular, of the nature, availability and price of housing lending in each national setting, as well as economic growth.