Who Is Less Likely to Get a Mortgage When Borrowing Limits Tighten?

Zuzana Gric, Simona Malovana and Dominika Ehrenbergerova

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: Borrower-based mortgage limits are designed to make lending safer, but they may not affect all households in the same way. We study how tighter loan-to-value and debt-service-to-income limits are associated with access to new mortgages across the income distribution. We combine household-level data from the Household Finance and Consumption Survey with hand-collected information on policy actions in 17 European countries over 2008-2019. We find that middle-income households are disproportionately affected. Following tightening, they are approximately 2 percentage points less likely than households in the top income decile to obtain a first mortgage on their main residence. The pattern is driven mainly by loan-to-value tightening. Among middle-income households, the differential effect is stronger for younger households, which typically have less accumulated savings and housing equity.

Keywords: Borrower-based measures; distributional effects; household borrowing; macroprudential policy; household finance and consumption survey (search for similar items in EconPapers)
JEL-codes: D31 E58 G21 G28 (search for similar items in EconPapers)
Date: 2026-07
New Economics Papers: this item is included in nep-hre
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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2026/10

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