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Who Is Less Likely to Get a Mortgage When Borrowing Limits Tighten?

Author

Listed:
  • Zuzana Gric
  • Simona Malovana
  • Dominika Ehrenbergerova

Abstract

Borrower-based mortgage limits are designed to make lending safer, but they may not affect all households in the same way. We study how tighter loan-to-value and debt-service-to-income limits are associated with access to new mortgages across the income distribution. We combine household-level data from the Household Finance and Consumption Survey with hand-collected information on policy actions in 17 European countries over 2008-2019. We find that middle-income households are disproportionately affected. Following tightening, they are approximately 2 percentage points less likely than households in the top income decile to obtain a first mortgage on their main residence. The pattern is driven mainly by loan-to-value tightening. Among middle-income households, the differential effect is stronger for younger households, which typically have less accumulated savings and housing equity.

Suggested Citation

  • Zuzana Gric & Simona Malovana & Dominika Ehrenbergerova, 2026. "Who Is Less Likely to Get a Mortgage When Borrowing Limits Tighten?," Working Papers 2026/10, Czech National Bank, Research and Statistics Department.
    • Handle: RePEc:cnb:wpaper:2026/10
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    File URL: https://www.cnb.cz/export/sites/cnb/en/economic-research/.galleries/research_publications/cnb_wp/cnbwp_2026_10.pdf
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    More about this item

    Keywords

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    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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