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Climate Change Risk and the Cost of Mortgage Credit

Nguyen, D.D.; Ongena, S.; Qi, S.; Sila, V.


S. Ongena

S. Qi

V. Sila


We show that lenders charge higher interest rates for mortgages on properties exposed to a greater risk of sea level rise (SLR). This SLR premium is not evident in short-term loans and is not related to borrowers’ short-term realized default or creditworthiness. Further, the SLR premium is smaller when the consequences of climate change are less salient and in areas with more climate change deniers. Overall, our results suggest that mortgage lenders view the risk of SLR as a long-term risk, and that attention and beliefs are potential barriers through which SLR risk is priced in residential mortgage markets.


Nguyen, D., Ongena, S., Qi, S., & Sila, V. (2022). Climate Change Risk and the Cost of Mortgage Credit. Review of Finance, 26(6), 1509-1549.

Journal Article Type Article
Acceptance Date Feb 11, 2022
Online Publication Date Mar 4, 2022
Publication Date 2022-11
Deposit Date Feb 15, 2022
Publicly Available Date Mar 5, 2024
Journal Review of Finance
Print ISSN 1572-3097
Electronic ISSN 1572-3097
Publisher Oxford University Press
Peer Reviewed Peer Reviewed
Volume 26
Issue 6
Pages 1509-1549
Keywords bank loans, residential mortgages, climate change risk, sea level rise, securitization
Public URL