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| Author: | Martins, N. C. Villanueva, E. |
| Title: | The impact of mortgage interest-rate subsidies on household borrowing |
| Journal: | Journal of Public Economics
2006 : SEP, VOL. 90:8-9, p. 1601-1623 |
| Index terms: | borrowing consumers interest rates mortgages subsidies |
| Language: | eng |
| Abstract: | This article estimates the effect on household borrowing of a reform of a program that subsidized interest rates on mortgages signed by medium- and low-income households. The findings are that the reform should affect most the borrowing behavior of eligible individuals living in high-price areas and that after the reform, the distribution of loan sizes became more concentrated at the discontinuity point of budget constraint of eligible individuals. The findings are consistent with a negative response of household borrowing to increase in interest rates. |
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