BIS Review 68/2007  3  consumers who begin with relatively low home equity. Another possible implication is that the structure of mortgage contracts may matter for consumption behavior.
In countries like the United Kingdom, for example, where most mortgages have adjustable rates, changes in short-term interest rates (whether induced by monetary policy or some other factor) have an almost immediate effect on household cash flows. If household cash flows affect access to credit, then consumer spending may react relatively quickly.