Work detail

Household Debt in the Czech Republic: Focus on Mortgage Amount Determinants

Author: Bc. Patricie Mittigová
Year: 2016 - summer
Leaders: doc. Ing. Tomáš Cahlík CSc.
Work type: Bachelors
Language: English
Pages: 76
Awards and prizes:
Abstract: The growth of household indebtedness in the last decade led to more attention paid to this issue since it
could threaten the stability of financial system in the future. In the Czech Republic, this rise is mainly
caused by the increased number of mortgage loans, which are usually the largest financial burden that
debtors have to repay. For that reason, I focus on mortgages since their growth has been the most
significant in comparison with other loan types. The aim of this thesis is to analyse how personal
characteristics affect one’s decision on the amount they choose to borrow in order to finance their
housing needs. For this purpose, I performed a multiple regression analysis applying several estimation
methods. By examining a random sample of ČSOB clients who have taken out a mortgage, I discovered
that person’s income, age, marital status, education and region a person lives in are significant factors
affecting debtor’s choice about how much they borrow. Conversely, the number of children affects the
amount borrowed only at higher quantiles of the distribution, whereas it is not a significant factor at
lower quantiles. This thesis complements rather a limited number of studies about the Czech household
debt as it provides new findings about a borrower’s decision.


Česká Spořitelna


Patria Finance