The Czech National Bank has published a working paper examining how tighter borrower-based mortgage limits affect access to new mortgages across the income distribution. Using household-level data from the Household Finance and Consumption Survey and hand-collected information on policy actions in 17 European countries from 2008 to 2019, the study finds that tighter loan-to-value and debt-service-to-income limits do not affect all households equally and are associated with a sharper reduction in first-mortgage access for middle-income households. Following tightening, middle-income households were about 2 percentage points less likely than households in the top income decile to obtain a first mortgage on their main residence. The result is driven mainly by tighter loan-to-value limits. Among middle-income households, the differential effect is stronger for younger households, which the paper links to lower accumulated savings and housing equity.
Czech National Bank2026-07-01
Czech National Bank working paper finds tighter mortgage borrower limits hit middle income first time buyers harder
The Czech National Bank published a working paper finding that tighter borrower-based mortgage limits reduce first-mortgage access more for middle-income households than for top-income households. Across 17 European countries over 2008 to 2019, middle-income households were about 2 percentage points less likely to obtain a first mortgage after tightening. The effect was driven mainly by loan-to-value limits and was stronger for younger middle-income households.