Mortgages, Subways and Automobiles New!

We examine the impact of subway expansions on mortgage repayment behavior in Delhi, India. Using administrative data from one of India’s largest mortgage lenders, we estimate that households in postal codes with newly opened stations experience a 4.42% decrease in mortgage delinquencies and a 1.38% increase in prepayments. These improvements are attributed to households’ reduced reliance on automobiles. Vehicle registration records show a 1.2% decline in the market share of four-wheelers, accompanied by a 6.5% drop in vehicle spending. Financially constrained households benefit the most, reducing purchases of low-quality vehicles and showing the largest improvements in mortgage repayment performance