Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach

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Our paper sets up a simple model to assess, for the first time, the relative pros and cons of housing downpayment (DS) and interest rate (IRS) subsidies on the access to and the stability of the mortgage market. Our analysis unveils a number of relevant policy lessons for the design of housing subsi...

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Autores principales: Bebczuk, Ricardo Néstor, Demaestri, Edgardo
Formato: Articulo
Lenguaje:Inglés
Publicado: 2015
Materias:
Ciencias Económicas
JEL: G21, G28
subsidios hipotecarios
mercado de hipotecas bancario
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/50707
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-50707
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
JEL: G21, G28
subsidios hipotecarios
mercado de hipotecas bancario
spellingShingle Ciencias Económicas
JEL: G21, G28
subsidios hipotecarios
mercado de hipotecas bancario
Bebczuk, Ricardo Néstor
Demaestri, Edgardo
Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
topic_facet Ciencias Económicas
JEL: G21, G28
subsidios hipotecarios
mercado de hipotecas bancario
description Our paper sets up a simple model to assess, for the first time, the relative pros and cons of housing downpayment (DS) and interest rate (IRS) subsidies on the access to and the stability of the mortgage market. Our analysis unveils a number of relevant policy lessons for the design of housing subsidy programs, among them: (a) For fiscal neutrality (same government outlay) to hold, the percentage IRS must be larger than the DS; (b) The IRS raises the loan size a bank is willing to grant, but the DS; (c) When targeting lower income households, the DS is superior to the interest rate subsidy; (d) The DS may increase the probability of default due to this focalization, while the IRS may have the same effect via the increased borrower leverage; and (e) Compared to the IRS, the DS promotes a less aggressive competition in the real estate market.
format Articulo
Articulo
author Bebczuk, Ricardo Néstor
Demaestri, Edgardo
author_facet Bebczuk, Ricardo Néstor
Demaestri, Edgardo
author_sort Bebczuk, Ricardo Néstor
title Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
title_short Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
title_full Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
title_fullStr Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
title_full_unstemmed Comparing Downpayment and Interest Rate Mortgage Subsidies: An Analytical Approach
title_sort comparing downpayment and interest rate mortgage subsidies: an analytical approach
publishDate 2015
url http://sedici.unlp.edu.ar/handle/10915/50707
work_keys_str_mv AT bebczukricardonestor comparingdownpaymentandinterestratemortgagesubsidiesananalyticalapproach
AT demaestriedgardo comparingdownpaymentandinterestratemortgagesubsidiesananalyticalapproach
bdutipo_str Repositorios
_version_ 1764820475303690241

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