INTEREST-ONLY MORTGAGES AND CONSUMPTION GROWTH: EVIDENCE FROM A MORTGAGE MARKET REFORM

• 成果类型: Article
• 署名作者: Backman, Claes; Khorunzhina, Natalia
• 署名单位: Copenhagen Business School; Copenhagen Business School
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12682
• 发表日期: 2024
• 页码: 1049-1079
• 关键词: financial crisis evidence; household debt; housing wealth; interest-rates; prices; income

摘要

We use household-level data to analyze how the introduction of interest-only (IO) mortgages in Denmark affected consumption expenditure and borrowing. Using an ex ante measure of exposure to the IO mortgage reform motivated by mortgage-payment and leverage constraints, we show households more likely to use an IO mortgage to relax their mortgage-payment constraint increased consumption following the reform. This increase in consumption is financed by borrowing at the time of refinancing and by borrowers with lower prereform leverage and higher needs for liquidity. We find even larger postreform consumption growth for the leverage-constrained homeowners through house-price growth stimulated by the reform.