Responses to Saving Commitments: Evidence from Mortgage Run-offs

Steffen Andersen, Philippe d’Astous, Stephen H. Shore, Jimmy Martínez-Correa

Publikation: KonferencebidragPaperForskningpeer review

Resumé

We study consumers’ responses to removing a saving constraint. Mortgage run-offs predictably relax a saving constraint for borrowers whose mortgage committed them to save by paying down principal. Using the entire Danish population, we identify mortgages on track to run off between 1995 and 2014. We measure the effect of run-offs on earnings and the household balance sheet. We find that borrowers use 39 percent of previous mortgage
payments to decrease labor income, and use 53 percent to pay down other debts. Borrowers run up non-mortgage debt prior to the run-off and this run-up stops once the mortgage is repaid.
OriginalsprogEngelsk
Publikationsdato2019
Antal sider43
StatusUdgivet - 2019
Begivenhed2019 Financial Management Association Global Conference in Latin America - Pontificia Universidad Javeriana, Bogota, Colombia
Varighed: 22 maj 201924 maj 2019
https://www.fma.org/bogota

Konference

Konference2019 Financial Management Association Global Conference in Latin America
LokationPontificia Universidad Javeriana
LandColombia
ByBogota
Periode22/05/201924/05/2019
Internetadresse

Citer dette

Andersen, S., d’Astous, P., Shore, S. H., & Martínez-Correa, J. (2019). Responses to Saving Commitments: Evidence from Mortgage Run-offs. Afhandling præsenteret på 2019 Financial Management Association Global Conference in Latin America, Bogota, Colombia.
Andersen, Steffen ; d’Astous, Philippe ; Shore, Stephen H. ; Martínez-Correa, Jimmy. / Responses to Saving Commitments : Evidence from Mortgage Run-offs. Afhandling præsenteret på 2019 Financial Management Association Global Conference in Latin America, Bogota, Colombia.43 s.
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Andersen, S, d’Astous, P, Shore, SH & Martínez-Correa, J 2019, 'Responses to Saving Commitments: Evidence from Mortgage Run-offs' Paper fremlagt ved 2019 Financial Management Association Global Conference in Latin America, Bogota, Colombia, 22/05/2019 - 24/05/2019, .

Responses to Saving Commitments : Evidence from Mortgage Run-offs. / Andersen, Steffen; d’Astous, Philippe; Shore, Stephen H.; Martínez-Correa, Jimmy.

2019. Afhandling præsenteret på 2019 Financial Management Association Global Conference in Latin America, Bogota, Colombia.

Publikation: KonferencebidragPaperForskningpeer review

TY - CONF

T1 - Responses to Saving Commitments

T2 - Evidence from Mortgage Run-offs

AU - Andersen, Steffen

AU - d’Astous, Philippe

AU - Shore, Stephen H.

AU - Martínez-Correa, Jimmy

PY - 2019

Y1 - 2019

N2 - We study consumers’ responses to removing a saving constraint. Mortgage run-offs predictably relax a saving constraint for borrowers whose mortgage committed them to save by paying down principal. Using the entire Danish population, we identify mortgages on track to run off between 1995 and 2014. We measure the effect of run-offs on earnings and the household balance sheet. We find that borrowers use 39 percent of previous mortgagepayments to decrease labor income, and use 53 percent to pay down other debts. Borrowers run up non-mortgage debt prior to the run-off and this run-up stops once the mortgage is repaid.

AB - We study consumers’ responses to removing a saving constraint. Mortgage run-offs predictably relax a saving constraint for borrowers whose mortgage committed them to save by paying down principal. Using the entire Danish population, we identify mortgages on track to run off between 1995 and 2014. We measure the effect of run-offs on earnings and the household balance sheet. We find that borrowers use 39 percent of previous mortgagepayments to decrease labor income, and use 53 percent to pay down other debts. Borrowers run up non-mortgage debt prior to the run-off and this run-up stops once the mortgage is repaid.

M3 - Paper

ER -

Andersen S, d’Astous P, Shore SH, Martínez-Correa J. Responses to Saving Commitments: Evidence from Mortgage Run-offs. 2019. Afhandling præsenteret på 2019 Financial Management Association Global Conference in Latin America, Bogota, Colombia.