Mortgage Relationships

23 Pages Posted: 14 Nov 2013

Date Written: August 12, 2013


We examine the closeness of relationships between households and their mortgage lenders using survey data which provide information on the duration, geographical proximity and scope of all bank relationships of a representative sample of households. Our analysis is based on a sample of 470 households which have a mortgage and multiple bank relations, allowing us to compare mortgage relations and non-mortgage relations for the same households. We find that mortgage relations are used for a broader scope of payment and saving transactions, have been more recently established, and are held with banks that are located closer to the household than non-mortgage relations. Examining the heterogeneity of mortgage relations across households, we find that financially sophisticated borrowers are less likely to hold their mortgage with a local bank. We find no evidence that more opaque borrowers, e.g. younger and urban households, maintain tighter mortgage relations.

Keywords: Mortgage loans, Household finance, Relationship banking

JEL Classification: G21, D14

Suggested Citation

Brown, Martin and Hoffmann, Matthias, Mortgage Relationships (August 12, 2013). University of St. Gallen, School of Finance Research Paper No. 2013/10. Available at SSRN: or

Martin Brown (Contact Author)

University of St. Gallen ( email )

Unterer Graben 21
St. Gallen, CH-9000

Matthias Hoffmann


No Address Available

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