Homeowners reduce consumption when the non-amortisation period ends

News - January 2020 - No. 1

Authors Danmarks Nationalbank
Subject Housing finance; household balance sheets
Type News
Year 2020
Published 9 January 2020
Homeowners’ with interest-only mortgages reduce consumption by an average of 3 per cent of income when amortisation starts if they are unable to roll over their interest-only loans into new ones as they might have expected to do. This corresponds to a reduction in expenditure of kr. 14,000 per homeowner per year. This appears from a Working Paper prepared by Henrik Yde Andersen, Senior Economist, Alessia De Stefani, Research Economist and Stine Ludvig Bech, Senior Economist.