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The Geography of Mortgage Lending in Times of FinTech

Author

Listed:
  • Christoph Basten

    (University of Zurich)

  • Steven Ongena

    (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR))

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.

Suggested Citation

  • Christoph Basten & Steven Ongena, 2019. "The Geography of Mortgage Lending in Times of FinTech," Swiss Finance Institute Research Paper Series 19-39, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1939
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    Cited by:

    1. Nicola Pierri & Yannick Timmer, 2020. "Tech in Fin before FinTech: Blessing or Curse for Financial Stability?," CESifo Working Paper Series 8067, CESifo.
    2. Pierri, Nicola & Timmer, Yannick, 2022. "The importance of technology in banking during a crisis," Journal of Monetary Economics, Elsevier, vol. 128(C), pages 88-104.
    3. Helmut Stix, 2020. "The Austrian bank branch network from 2000 to 2019 from a spatial perspective," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 40, pages 87-101.
    4. Tobias Berg & Andreas Fuster & Manju Puri, 2022. "FinTech Lending," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 187-207, November.

    More about this item

    Keywords

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    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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