TY - JOUR
T1 - COVID-19 mortality risk premium and the interest rate on mortgage loans
AU - Gill, Balbinder Singh
N1 - Publisher Copyright:
© 2024 Elsevier Inc.
PY - 2024/5
Y1 - 2024/5
N2 - I investigate the impact of COVID-19 on the housing market, with a focus on mortgage interest rates. Rising COVID-19 fatalities result in higher mortgage interest rates. I use the Gaussian Copula approach to establish causality between COVID-19 fatalities and mortgage interest rates. Finally, I present a thorough examination of the mechanisms by which COVID-19 fatalities influence mortgage interest rates. The health concern channel is the most important. Banks raise the interest rate because they are concerned about the borrower's health or potential death. Lower interest rates for borrowers who alleviated this type of worry from banks by purchasing mortgage insurance.
AB - I investigate the impact of COVID-19 on the housing market, with a focus on mortgage interest rates. Rising COVID-19 fatalities result in higher mortgage interest rates. I use the Gaussian Copula approach to establish causality between COVID-19 fatalities and mortgage interest rates. Finally, I present a thorough examination of the mechanisms by which COVID-19 fatalities influence mortgage interest rates. The health concern channel is the most important. Banks raise the interest rate because they are concerned about the borrower's health or potential death. Lower interest rates for borrowers who alleviated this type of worry from banks by purchasing mortgage insurance.
KW - Coronavirus
KW - COVID-19
KW - Household finance
KW - Mortgage interest rate
KW - Pandemic
UR - http://www.scopus.com/inward/record.url?scp=85188059262&partnerID=8YFLogxK
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U2 - 10.1016/j.irfa.2024.103183
DO - 10.1016/j.irfa.2024.103183
M3 - Article
AN - SCOPUS:85188059262
SN - 1057-5219
VL - 93
JO - International Review of Financial Analysis
JF - International Review of Financial Analysis
M1 - 103183
ER -