Mortgage Innovation and House Price Booms
Working Paper. 2023. Citation
- Revise and Resubmit, Journal of Urban Economics
- 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.