Working Paper: The role of refinancing in the interest rate pass-through to fixed-rate mortgage contracts

Working Paper - April 2021 - No. 174

Authors Hensch, Jonas Ladegaard
Subject Monetary-policy transmission; Monetary conditions; Rates and foreign-exchange
Type Working paper
Year 2021
Published 12 April 2021
Abstract icon In this paper, I study how mortgage refinancing influences the interest rate pass-through to household budgets via fixed-rate mortgage contracts in Denmark. The paper shows that the long-run interest rate pass-through is significantly below unity in the years after the financial crisis and subsequently converges towards a level close to unity. The result can be used to understand the importance of the asymmetric effects of monetary policy transmission.