Martin Hodula, Simona Malovaná, Lukáš Pfeifer
This paper examines how mortgage lending adjusts when higher interest rates coincide with tighter borrower-based regulatory constraints. Using loan-level data from the Czech Republic for 2020–2023, we exploit a unique policy sequence that combines rapid monetary tightening with the subsequent re-tightening of LTV, DTI, and DSTI limits in order to trace changes in borrower and loan characteristics among new originations. During the initial phase of tightening, higher interest rates curtailed mortgage lending, yet some adjustment was still possible: new loans started to feature higher downpayments and longer maturities, which partly absorbed the rise in financing costs. As tightening persisted and borrower-based limits were reinstated, these adjustment margins narrowed. Liquidity buffers were depleted, and new lending increasingly reflected financially stronger borrowers with lower leverage and lower default risk. The evidence further shows that while monetary policy primarily reduced lending volumes, it was the re-application of borrower-based limits that improved the risk composition of new loans.
JEL kódy: E58, G21, G28, G51
Klíčová slova: Borrower-based limits, household finance, loan-level data, macroprudential policy, monetary policy
Vydáno: leden 2026
Ke stažení: CNB WP No. 2/2026 (pdf, 3 MB)