The economics of Housing Savings Plans

Pnina O. Plaut, Steven E. Plaut

Research output: Contribution to journalArticlepeer-review


Housing Savings Plans (HSP) are contractual savings products in which a household is granted a mortgage at preferential terms (or option for such) in exchange for accumulating savings in the plan and in tile institution offering it. As such, they represent a bundle of savings and borrowing financial services. While such plans are common in some countries, the reasons for their use have not been fully explored. In some cases, HSPs are used because financial markets and institutions have not reached sufficient levels of development to attract savings or raise capital for housing finance, and in other cases, tax and subsidy incentives may be at play. Here, we ask under which circumstances households and financial institutions will voluntarily contract to participate in HSPs even in advanced capital markets and in the absence of tax/subsidy incentives. We argue that the HSPs may be chosen by households because of their hedging qualifies. We model HSPs mid show how changes in variables affect the willingness of households to join the HSP and the characteristics of any HSP chosen.

Original languageEnglish
Pages (from-to)319-337
Number of pages19
JournalJournal of Real Estate Finance and Economics
Issue number4
StatePublished - May 2004


  • Banks
  • Contract savings
  • Housing
  • Mortgages

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Urban Studies


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