The Geography of Mortgage Lending in Times of FinTech

Christoph Basten and Steven Ongena

No 19-39, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We analyze how banks’ allocations of mortgage credit across regions change when an online platform enables them to offer to regions where they have no branches, staff or legacy. Unique data from an online platform with offers from different banks to each mortgage application yield three novel findings. First, banks offer more and cheaper credit to borrowers in less competitive offline markets. Second, banks offer more credit to more distant locations, where house prices appear less over-heated, and past price growth is less correlated with that in their existing portfolio. Third, over time offers become more automated, lowering operational costs.

Keywords: Mortgage Lending; Spatial Competition; Credit Risk; Diversification; Automation of Banking; FinTech; Online Pricing (search for similar items in EconPapers)
JEL-codes: G2 L1 R2 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-08
New Economics Papers: this item is included in nep-ban, nep-com, nep-pay and nep-ure
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Geography of Mortgage Lending in Times of FinTech (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1939

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