Income Volatility and Residential Mortgage Delinquency: Evidence from 12 EU countries

Luis Diaz-Serrano ()

Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth

Abstract: We investigate the socio-economic determinants of mortgage delinquency in 12 EU countries and observe that income volatility significantly increases the mortgage delinquency risk. This pattern even holds for borrowers with higher-income profiles if volatility in income is high enough. From this result we can draw the following conclusions i) mortgage protection insurance policies might be failing to cover those borrowers most in need ii) the existence of credit market imperfections, and iii) the inability for a number of borrowers most at income risk to accumulate precautionary savings in order to meet mortgage payments when shocks in income arise.

Keywords: Income volatility; mortgage delinquency; mortgage insurance (search for similar items in EconPapers)
JEL-codes: D1 J0 R0 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2005-02
New Economics Papers: this item is included in nep-eec and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://repec.maynoothuniversity.ie/mayecw-files/N1530205.pdf (application/pdf)

Related works:
Working Paper: Income Volatility and Residential Mortgage Delinquency: Evidence from 12 EU Countries (2004)
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:may:mayecw:n1530205

Access Statistics for this paper

More papers in Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).