Mortgage Innovation and House Price Booms

Published in Working Paper, 2022

Recommended citation: Working Paper. 2022. Citation /files/Mortgage Innovation and House Price Booms.pdf

  • Key Highlight: The Danish introduction of IO mortgages ignited a housing boom: due to their introduction, house prices increased 36 percent. In line with IO loans fueling house price appreciation by lowering debt-service payments, results show higher IO loan uptake and house price growth in areas with greater ex-ante benefits of such mortgages.
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