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Mortgage Lock-in: A Review of the Literature

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Abstract

This paper reviews the rapidly growing literature on mortgage lock-in and its effects on household mobility, labor reallocation, home sales, owner-occupied prices, and spillovers into rental and commercial markets. We then discuss two future research directions: (1) separately identifying lock-in effects from the direct effects of the existing interest rate on the mortgage, which have different implications for household behavior as market interest rates rise, and (2) assessing the general-equilibrium consequences of reduced mobility on labor markets and productivity. We close by discussing policy responses, including portability, broader assumability, and a Danish-style delivery option.

Suggested Citation

  • Kristopher Gerardi & Franklin Qian & David Hao Zhang, 2026. "Mortgage Lock-in: A Review of the Literature," FRB Atlanta Working Paper 2026-11, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:103593
    DOI: 10.29338/wp2026-11
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    File URL: https://www.atlantafed.org/-/media/Project/Atlanta/FRBA/Documents/research/publication/working-paper/2026/08/03/11-mortgage-lock-in-review-of-the-literature.pdf
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    Keywords

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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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