 Easing of borrower-based measures: Evidence from Czech loan-level dataMartin Hodula, Lukáš Pfeifer and Ngoc Anh Ngo Journal of Banking & Finance, 2025, vol. 178, issue C Abstract: We analyze the impact of easing borrower-based measures on residential mortgage credit and borrower characteristics in the Czech Republic in early 2020. This easing included a relaxation of the LTV limit and the abolition of the DTI and DSTI limits. Our findings indicate that affected households increased borrowing, purchased more expensive houses, and accepted lower collateral values. Borrowers' debt service burdens rose but were offset by income growth. We find that: (i) LTV-constrained borrowers exhibited cash-retention behavior, while DTI- and DSTI-constrained borrowers aligned with the financial accelerator motive; (ii) LTV relaxation had a greater effect in poorer counties, while the abolition of DTI and DSTI limits affected richer regions; (iii) younger borrowers were more impacted by LTV and DTI easing, whereas DSTI easing influenced older borrowers; and (iv) LTV relaxation primarily affected first-time borrowers, while the abolition of DTI and DSTI limits impacted repeat borrowers, who obtained larger mortgages and purchased more expensive properties. Keywords: Borrower-based measures; Household finance; Loosening; Macroprudential policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:178:y:2025:i:c:s0378426625001098 DOI: 10.1016/j.jbankfin.2025.107489 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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