Mortgage refinancing supports private consumption

Analysis – September 2019 – No. 17

Authors Andersen, Henrik Yde; Bech, Stine Ludvig; Otte, Alexander Meldgaard; Julin, Ida Rommedahl
Subject Lending rate; Lending; Change in interest rates; Housing finance; Financial markets
Type Analysis
Year 2019
Published 16 September 2019
Falling mortgage rates have made mortgage refinancing attractive in order to reduce overall home financing costs. Many homeowners raise additional mortgage debt when refinancing. The additional funds are used for increased consumption and home improvements. However, some homeowners spend the funds on reducing other debt or building up a liquidity buffer.