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How Mortgage Interest Rates and Salaries Affect the Mortgage Debt

Author

Listed:
  • Svetlana Todorova

    (University of Economics - Varna)

  • Dimitria Karadimova

    (University of Economics - Varna)

Abstract

This paper explores the relationship between household mortgage debt and mortgage interest rate and salary in Bulgaria. The monthly data in this research paper is from January 2007 to June 2020, from existing official sources - NSI (National Statistical Institute) and BNB (Bulgarian National Bank). The chosen initial period is related to the beginning of the Monetary Board and the macroeconomic stability of the country after the Board. The research methodology includes correlation, regression analysis and related tests of statistical hypotheses. Based on the results, we derive the estimated regression equation that can be used to explain the impact of changes in independent variables on the dependent variable and to make predictions. We found that mortgage debt is positively associated with salary and negatively associated with mortgage interest rate.

Suggested Citation

  • Svetlana Todorova & Dimitria Karadimova, 2020. "How Mortgage Interest Rates and Salaries Affect the Mortgage Debt," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 9(1), pages 63-70, April.
    • Handle: RePEc:vra:journl:v:9:y:2020:i:1:p:63-70
    DOI: 10.36997/IJUSV-ESS/2020.9.1.63
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    References listed on IDEAS

    as
    1. Alessandro Calza & Tommaso Monacelli & Livio Stracca, 2013. "Housing Finance And Monetary Policy," Journal of the European Economic Association, European Economic Association, vol. 11, pages 101-122, January.
    2. Hristo Mavrov, 2011. "The global financial crisis and the housing market in Bulgaria," Business & Management Compass, University of Economics Varna, issue 3, pages 18-29.
    3. Ying Fan & Abdullah Yavas, 2020. "How Does Mortgage Debt Affect Household Consumption? Micro Evidence from China," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(1), pages 43-88, March.
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    More about this item

    Keywords

    Mortgage Debt; Mortgage Interest Rate; Salary; Multiple Regression;
    All these keywords.

    JEL classification:

    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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