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 have estimated a new measure of pension wealth gains, covering the working-age population in Denmark during 2015-2022, in collaboration with Statistics Denmark. By linking this new data to the existing income and tax registers at the individual level, we provide a full picture of net...

The corona epidemic has reduced the consumption of Danish households, which will temporarily lower the consumption rate. For a prolonged period, Danish households have saved and are in general well equipped for a contraction of the Danish economy. Therefore, the consumption rate is expected to...

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....

Rising mortgage rates have led to one in five Danish fixed-rate mortgages to be refinanced during the first three quarters of 2022. The unique Danish match-funding principle has allowed fixed rate mortgage borrowers to buy back their existing mortgages at a 18 per cent discount, on average. 62...

This memo studies the impact of demographic shifts and income inequality on the evolution of savings rates in Denmark, and compares with evidence from the US. Income inequality has followed similar trends in Denmark as in the US, and savings rates vary in a similar way over the life cycle and...

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 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...

Money is a scarce resource for most people. For that reason, the decision whether to spend more today and less in the future or vice versa is a recurrent question to many of us. Pension systems provide incentives for saving for future consumption and mortgage markets allow us to increase...

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...