EconPapers    
Economics at your fingertips  
 

Till mortgage do us part: Mortgage switching costs and household's bank switching

Marianna Brunetti (), R. Ciciretti and Lj. Djordjevic

Journal of Banking & Finance, 2020, vol. 119, issue C

Abstract: We investigate the role of mortgage switching costs in shaping the households’ decision to change their main bank. To this end, we use a unique panel dataset that enables us to infer household's bank switching, in conjunction with a legal reform that exogenously slashed down the mortgage switching costs. The empirical evidence, which survives to a variety of robustness checks, supports the hypothesis that the explicit switching costs in the retail banking market are a weighty factor in shaping households’ bank switching, despite any potential “informational lock-in”. Dissecting the results, we show that the effects of the reform were not uniform across households. The more educated households, those with a longer or broader relationship with their previous bank and those residing in ex-ante less competitive banking markets were at the forefront of the wave of bank switching.

Keywords: Bank switching; Mortgage switching costs; Household finance (search for similar items in EconPapers)
JEL-codes: G21 D14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426620301709
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Till Mortgage Do Us Part: Mortgage Switching Costs and Household’s Bank Switching (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:119:y:2020:i:c:s0378426620301709

DOI: 10.1016/j.jbankfin.2020.105904

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

 
Page updated 2021-03-28
Handle: RePEc:eee:jbfina:v:119:y:2020:i:c:s0378426620301709