scholarly journals Fixed Rate versus Adjustable Rate Mortgages: Evidence from Euro Area Banks

2020 ◽  
Author(s):  
Ugo Albertazzi ◽  
Fulvia Fringuellotti ◽  
Steven R. G. Ongena
Keyword(s):  
Euro Area ◽  
Fixed Rate ◽  
Rate Versus ◽  
Adjustable Rate

scholarly journals Fixed Rate versus Adjustable Rate Mortgages: Evidence from Euro Area Banks

2019 ◽  
Author(s):  
Ugo Albertazzi ◽  
Steven Ongena ◽  
Fulvia Fringuellotti
Keyword(s):  
Euro Area ◽  
Fixed Rate ◽  
Rate Versus ◽  
Adjustable Rate

scholarly journals Fixed Rate Versus Adjustable Rate Mortgages: Evidence from Euro Area Banks

2018 ◽  
Author(s):  
Ugo Albertazzi ◽  
Fulvia Fringuellotti ◽  
Steven R. G. Ongena
Keyword(s):  
Euro Area ◽  
Fixed Rate ◽  
Rate Versus ◽  
Adjustable Rate

How Do Homeowners Choose Between Fixed and Adjustable Rate Mortgages?

2016 ◽  
Vol 06 (04) ◽  
pp. 1650013 ◽  
Author(s):  
Yevgeny Mugerman ◽  
Moran Ofir ◽  
Zvi Wiener
Keyword(s):  
Interest Rate ◽  
Housing Prices ◽  
Optimal Choice ◽  
Housing Finance ◽  
Short Term ◽  
Fixed Rate ◽  
High Interest Rate ◽  
Theoretical Literature ◽  
Rate Environment ◽  
Adjustable Rate

Housing is the most important asset in the portfolio of most households. Understanding the households’ decision on housing finance has important implications from a policy perspective, due to the effects it may have on the housing prices, on the housing market stability and on household welfare. The theoretical literature on housing finance focused on figuring out the optimal choice between fixed rate mortgages (FRMs) and adjustable rate mortgages (ARMs). We argue that the standard economic criteria are sometimes inadequate to explain household’s choices, which may be motivated by psychological factors. In other words, we claim that household’s choice depends only partially on the findings of the theoretical literature. We examine the effect of changes in the short-term market interest rate on the households’ choice between FRMs and ARMs. We test this effect using a unique data provided to us by the Bank of Israel, which contains detailed information on the household’s decision between FRM and ARM contracts in Israel in the past decade. The results of our analysis demonstrate a significant association between FRM preference and short-term interest rate reduction. Moreover, we find that the change in the short-term interest rate is more salient to the borrowers in periods of a high interest rate environment. We attribute these findings to Tversky and Kahneman (1974) availability and representativeness heuristics.

Exploring the Role of Financial Disclosure Forms in Mortgage Type Selection

2017 ◽  
Vol 28 (2) ◽  
pp. 285-299
Author(s):  
Travis P. Mountain ◽  
Michael S. Gutter ◽  
Jorge Ruiz-Menjivar ◽  
Zeynep Çopur
Keyword(s):  
Treatment Group ◽  
Federal Reserve ◽  
Group Treatment ◽  
Financial Disclosure ◽  
Fixed Rate ◽  
Type Selection ◽  
The Difference ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
Fixed Rate Mortgage

The purpose of this study was to determine whether using a financial disclosure form in a controlled setting can influence consumers’ mortgage selection. This study used a 2 × 2 experimental design where participants were assigned randomly to a control or treatment group. Treatment group participants received a Federal Reserve Board document that contained information explaining the difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage (FRM). All participants were presented with two distinct scenarios and were asked to determine the most appropriate mortgage for each. Logistic regression results suggested that receiving the Federal Reserve Board document does make a difference in consumers’ mortgage choice in hypothetical scenarios. Financial knowledge and Truth in Lending Act knowledge were also were important predictors.

A STOCHASTIC DOMINANCE ANALYSIS OF THE FIXED-RATE VERSUS VARIABLE-RATE MORTGAGOR

1977 ◽  
Vol 12 (3) ◽  
pp. 137-138
Author(s):  
R. Tarantello ◽  
M. Chapman Findlay
Keyword(s):  
Stochastic Dominance ◽  
Variable Rate ◽  
Fixed Rate ◽  
Dominance Analysis ◽  
Rate Versus

International Real Estate Review

2009 ◽  
Vol 12 (2) ◽  
pp. 98-120
Author(s):  
Masaki Mori ◽  
◽  
Julian Diaz ◽  
Alan J. Ziobrowski ◽  
◽  
...  
Keyword(s):  
Risk Factors ◽  
Real Estate ◽  
Interest Rates ◽  
Psychological Factors ◽  
Business Professionals ◽  
Fixed Rate ◽  
Pricing Factors ◽  
Adjustable Rate ◽  
Associated Risk Factors

A considerable number of U.S. borrowers still choose adjustable rate mortgages (ARMs) over fixed rate mortgages (FRMs) even when interest rates are historically very low. This study examines the psychological reasons for the popularity of ARMs by testing the Prospect theory’s reflection hypothesis. Experiments are conducted using business professionals. The results suggest that psychological factors may explain why ARM borrowers tend to ignore the associated risk factors, focusing heavily upon pricing factors when choosing mortgage type. The results also indicate that borrowers may be viewing mortgage selection as part of a positive choice; namely, acquiring a home.

Postoperative Analgesia with Intramuscular Morphine at Fixed Rate Versus Epidural Morphine or Sufentanil and Bupivacaine in Patients Undergoing Major Abdominal Surgery

1998 ◽  
Vol 87 (6) ◽  
pp. 1346-1353 ◽  
Author(s):  
Alida A. Broekema ◽  
Alexander Veen ◽  
Vaclav Fidler ◽  
Mathieu J. M. Gielen ◽  
Pim J. Hennis
Keyword(s):  
Abdominal Surgery ◽  
Postoperative Analgesia ◽  
Epidural Morphine ◽  
Major Abdominal Surgery ◽  
Fixed Rate ◽  
Rate Versus

scholarly journals Simulasi Penghitungan Online Kredit Pemilikan Rumah Bank Xyz Berbasis Web di Portal Finansial www.kontan.co.id

2013 ◽  
Vol 4 (1) ◽  
pp. 190
Author(s):  
Albert V. Dian Sano
Keyword(s):  
Interest Rates ◽  
Web Application ◽  
Mortgage Loan ◽  
Fixed Rate ◽  
Online Application ◽  
Mortgage Interest ◽  
Mortgage Interest Rate ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
Fixed Rate Mortgage

The objective of this study is to develop an online application of mortgage loan simulation. This application is developed based on a web application in order to be accessible anywhere and anytime. This application is expected to help prospective property’s consumers calculate their financial plans related to decisions concerning the amount of down payment, loan term, and the mortgage system model to be selected. There are two models of mortgage in this application. The first is a fixed and cap rate of interest, with the first three years of the mortgage interest rate of 9.75%, the fourth and fifth year interest of 10%, and the sixth year onwards using a rate cap interest with the indication of 12%. The second model is a 2-year fixed rate mortgage with the first two years rate of 8.5% and the third year onwards using adjustable rate mortgage of interest with the indication of 12%. Calculation formula and the interest rates in this application are obtained from Bank XYZ which is in turn applied in collaboration with financial portal www.kontan.co.id. This application has been tested by over 1000 users and the results are well proven and valid.

Randomized Controlled Trial of Fixed Rate Versus Rate Responsive Pacing After Radiofrequency Atrioventricular Junction Ablation:

2003 ◽  
Vol 14 (11) ◽  
pp. 1163-1170 ◽  
Author(s):  
HENRY J. DUFF ◽  
SATISH R. RAJ ◽  
DEREK V. EXNER ◽  
ROBERT S. SHELDON ◽  
DAN ROACH ◽  
...  
Keyword(s):  
Randomized Controlled Trial ◽  
Controlled Trial ◽  
Fixed Rate ◽  
Atrioventricular Junction ◽  
Randomized Controlled ◽  
Rate Versus ◽  
Rate Responsive

scholarly journals Behavioral Finance: Household Investment and Borrowing Decisions

2017 ◽  
pp. 15-29
Author(s):  
Pavlo Illiashenko
Keyword(s):  
Asset Pricing ◽  
Behavioral Finance ◽  
Empirical Work ◽  
Household Finance ◽  
Individual Investors ◽  
Debt Contracts ◽  
Fixed Rate ◽  
Wide Audience ◽  
Adjustable Rate ◽  
And Behavior

Behavioral finance is still mostly perceived as a field solely devoted to the study of asset pricing and behavior of individual investors. This interpretation to a large extent is misleading as it overlooks a growing body of empirical work in household finance, a subfield of behavioral finance concerned with household investment and borrowing decisions. By focusing on household under-saving, non-participation, and under-diversification, as well as mistakes in choosing debt contracts and managing debt obligations, this paper aims at presenting recent findings in household finance to a wide audience. This review differs from the existent ones as it focuses on the plurality of non-mutually exclusive explanations of the observed phenomena, including those that come from the competing research traditions. The special emphasis is made on the choice between fixed rate and adjustable rate mortgages, given its significance for macrofinancial stability. The review also discusses the evidence indicating that firms are aware of households’ behavioral weaknesses and readily exploit them.

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