This paper introduces a framework to jointly account for the affordability of the periodic repayment of the housing debt (income constraint) and of the initial deposit (budget constraint). An application to 2006-2012 micro-data on Italian households indicates that the improvement in the ability...

We build a model of the mortgage market where banks attain their optimal mortgage portfolio by setting rates and "steering" customers. "Sophisticated" households know which mortgage type is best for them, while "naïve" ones are susceptible to steering by their banks. Using data on the universe...

We build a model of the mortgage market where banks attain their optimal mortgage portfolio by setting rates and steering customers. Sophisticated households know which mortgage type is best for them; naive households are susceptible to banks' steering. Using data on the universe of Italian...