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Mortgage down-payment and welfare in a life-cycle model

Michał Rubaszek ()

Bank i Kredyt, 2012, vol. 43, issue 4, 5-28

Abstract: The paper presents a standard incomplete markets life-cycle model with housing that is calibrated to the Polish economy. The model is used to analyze the effects of changes in the minimum down-payment restriction on welfare. Our analysis shows that tougher credit conditions have a significant impact on the level of household debt, the ownership ratio and the time of first house purchase. However, assuming well functioning rental market the welfare costs are not sizable.

Keywords: life-cycle model; housing; mortgage down-payment; welfare (search for similar items in EconPapers)
JEL-codes: E21 E50 R21 (search for similar items in EconPapers)
Date: 2012
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Handle: RePEc:nbp:nbpbik:v:43:y:2012:i:4:p:5-28