This paper analyzes how changes in household debt policies and housing finance environment affect household borrowing decisions, housing prices, and welfare. I examine three types of housing finance environmental changes. First, when the government relaxes the loan-to-value (LTV) ratio regulation, housing price, rent price, and household debt increase simultaneously. An increase in the residence cost leads to a decrease in the economy-wide welfare. However, the proportion of households that support the relaxed LTV regulation is higher than non-supporters. Second, when the mortgage refinance is restricted, housing price, rent price, and household debt decrease. Though a decrease in residential expenses increases household welfare, the proportion of households that support such a change is less than the half of the entire population. Third, when the average household income decreases, housing demand, price, and rent price decrease. Since a decrease in household income reduces life time consumption, the economy-wide welfare decreases.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Literature Review

Chapter 3 Mortgage Loan Model
　Section 1 Basic Environment
　Section 2 Household Decision-Making
　Section 3 Financial Institution Decision-Making
　Section 4 Definition of Steady-State Equilibrium

Chapter 4 Calibration and Steady-State Economic Analysis
　Section 1 Parameter Settings
　Section 2 Steady-State Economic Analysis
　Section 3 Household Decision-Making Analysis

Chapter 5 Policy and Economic Environment Changes
　Section 1 Loan-to-Value (LTV) Regulation Relaxation
　Section 2 Restrictions on Mortgage Refinancing and New Loans
　Section 3 Decline in Average Household Income

Chapter 6 Summary and Conclusion

References
Appendix
ABSTRACT