Payment holidays, credit risk, and borrower-based limits: Insights from the Czech mortgage market

Key Points

• Payment holidays increase the overall credit risk for borrowers, potentially leading to defaults.
• Credit risk evaluation shows vulnerabilities in borrower-based limits, particularly during economic downturns.
• Analysis of mortgage data from the Czech market highlights the influence of payment holidays on borrower finances.
• Implications suggest that lenders should reassess risk frameworks to accommodate changes related to mortgage payment holidays.