Interest-only mortgages (IOMs) were popular before the 2007-2008 financial crisis, e.g. in the US and UK, and remain common in a few countries today, including the Netherlands, Sweden and Denmark. We use Danish administrative data, covering all mortgage loans originated between 2010 and 2019, to...

We study how homeowners' consumption responds to a negative and anticipated disposable income shock: the beginning of the amortisation period on interest-only mortgages. We identify spending behavior through an event study approach, by matching loan-level data that covers the universe of Danish...

We study the effect of house price developments on home-equity extraction and household expenditure, exploiting data covering the population of Danish homeowners between 2009 and 2016. Our findings indicate that house price increases affect home-equity extraction - and more so for homeowners...

We study how a reduction in financial constraints faced by homeowners affects consumption, and in turn employment creation and the skill composition of the workforce over the business cycle. We leverage a wide set of Danish administrative registries, and implement a difference-in-differences...

In this paper we examine whether house price changes drive mortgage-based equity extraction. To do this we use longitudinal survey data with subjective information about current and expected future house prices to calculate unanticipated house price changes. We link this information at the...

This paper uses two decades of individual level information from Danish administrative registers to show that a 1-dollar increase in pension wealth leads to a 26-cent rise in total debt. We exploit time-sector variation in mandatory pension contribution rates to isolate the effect of pension...

This paper offers new empirical evidence on the marginal propensity to consume out of an unanticipated liquidity shock. A Danish 2012 policy reform reduced the incentive to retire early in order to increase labour supply but at the same time the policy released a substantial amount of savings...

Measuring the effect of an unanticipated reduction in tax credits on pension savings, this paper shows that individuals tend to make extraordinary repayments on their debt when saving in retirement accounts becomes less attractive. We conclude that tax-favoured retirement accounts could affect...

In this paper, we evaluate Danish homeowners' interest-rate sensitivity in terms of the partial effect of a 1 percentage point increase in interest rates on homeowners cash flows and balance sheets. We construct two measures to quantify the effect of an increase in interest rates on homeowners....