Mortgage caps can be higher for insured borrowers – DNB paper
Loan-level data from Netherlands shows insurance cuts risk of non-performance, say researchers
Loan-to-value caps should be much higher for borrowers with mortgage insurance than for those without, a working paper published by the Netherlands Bank says.
In the paper, Leo de Haan and Mauro Mastrogiacomo use evidence on Netherlands housing loans originated from 1996 to 2015.
The authors look at the loans’ originating loan-to-value ratio (OLTV) and their debt-service-to-income ratio (DSTI). They find that both ratios “are significantly positively associated with the probability of non
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