Trading equity for liquidity reduces mortgage default rates, study finds.
The report looks at how having enough money saved up after buying a house affects the chances of missing mortgage payments. It found that having enough savings (liquidity) is more important than having a lot of equity or a high income. People with little savings after buying a house were more likely to miss payments than those with more savings. It suggests that putting a bit less money down when buying a house and keeping some savings for emergencies could help reduce the risk of missing payments.