This paper develops a general equilibrium model featuring tax deductible mortgage interest. There are two main results …: (i) a higher mortgage interest deduction leads to higher house prices, more levered households, and a higher rate of … mortgage default; (ii) when mortgage risk is high the presence of mortgage interest deduction leads to more volatile responses …

In 2005, mortgage interest, capital deductions and insurance premiums (MICPD) were assembled into one single deduction … Finance and Consumption Survey. The mortgage amount, the mortgage maturity, the interest rate and the house price are … estimated simultaneously using a 3-SLS approach. The results suggest that the mortgage deduction does not result in more …

important cause of policy uncertainty for households in the Netherlands: the possible limitation of the mortgage interest …