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Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Daily Overview

Session

HHF 3: Household Finance III: Mortgages

Time:

Monday, 03/Aug/2026:

4:00pm - 5:30pm

Session Chair: Charline Uhr

Location: Auditorium 1812-111

Presentations

The Response of Debtors to Rate Changes

Andreas Fuster¹, Virginia Gianinazzi², Andreas Hackethal³, Philip Schnorpfeil³, Michael Weber⁴

¹EPFL; ²Nova SBE; ³Goethe University Frankfurt; ⁴Purdue University

Discussant: Carolin Hoeltken (University of Cambridge)

How borrowers respond to future changes in the interest rate on their debt matters for the transmission of monetary policy and for household financial stability. Combining bank data, a letter RCT, and a survey, we study this question in the context of the German mortgage market, where since 2022 borrowers have faced high interest rates when their rate fixation period ends. We find that borrower actions substantially reduce the impact of higher rates on monthly payments. Survey responses corroborate high informedness and a strong propensity to prepare for rate changes. The letter intervention does not affect rate beliefs but increases awareness of available options and refinancing among borrowers close to expiration of their rate fixation.

A Danish Fix for U.S. Mortgage Lock-in?

David Berger², Jaehun Jeong², Julie Marx¹, Maria Victoria Olesen¹, Fabrice Tourre³

¹Copenhagen Business School, Denmark; ²Duke University; ³Baruch College, City University of New York

Discussant: Virginia Gianinazzi (Nova SBE)

We study Danish fixed-rate mortgage contracts, which are identical to those in the United States except that borrowers may repurchase their mortgages at market value. Using Danish administrative data, we show that households actively buy back debt when mortgage prices fall below par and that household mobility is largely insensitive when existing mortgage rates are below prevailing market rates-unlike in the United States, where moving rates fall sharply as rates rise. We develop an equilibrium model that explains these patterns and show that introducing a repurchase-at-market option into U.S. mortgages substantially reduces interest-rate-induced lock-in with limited effects on equilibrium mortgage rates.

Left out: The effect of macroprudential policies on first-time homebuyers

João F. Cocco³, Linda Sandris Larsen², Rikke Sejer Nielsen¹, Ulf Nielsson², Jesper Rangvid²

¹University of Southern Denmark, Denmark; ²Copenhagen Business School, Denmark; ³London Business School, United Kingdom

Discussant: Jin Cao (Norges Bank)

We study the distributional consequences of financing constraints using a policy that restricted ‘risky’ lending to borrowers in selected Copenhagen municipalities (treated) but not in immediately adjacent areas (controls). Using administrative data we show a post-policy decline in risky originations in treated areas. The policy changes who buys, what they buy, and where they buy. On the extensive margin, there is no significant effect on transition into homeownership, but purchase location shifts – renters from treated areas are 3 pp less likely to buy within the treated area, indicating displacement to neighboring municipalities. On the intensive margin, first-time buyers in treated areas are older, higher-income, and hold more liquid financial assets at purchase.