Mortgage Usage and Mortgage Payments as Share of Income in China: Comparing Residential Homeowners and Housing Investors

The study investigates factors associated with mortgage usage and the share of income that Chinese use for mortgage payments. Using data from the 2010 China Family Panel Study, we found mortgage usage shows a hump-shaped income effect. Workers in government-controlled nonprofit institutions are more likely to use a mortgage to purchase a house because banks treat them favorably. Notably, government employees borrow less to purchase a residence because they have advantages by way of subsidies. Individuals who have attained higher education are more likely to use a mortgage and have a larger share of their monthly income devoted to mortgage payments. For housing investors, risk tolerance is positively associated with mortgage use but not with the share of mortgage payments in the household's monthly expenditure.