scholarly journals THE NATURE OF MORTGAGE REPAYMENT PLANS IN GHANA

2020 ◽  
Vol 2 (3) ◽  
pp. 91-104
Author(s):  
Justice Agyei Ampofo
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
Supply And Demand ◽  
Mortgage Lending ◽  
Housing Finance ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Middle Income ◽  
Exchange Rate Fluctuations ◽  
Lending Institutions

Mortgage finance is one source of capital that cannot be ruled out when it comes to housing finance. It has globally aided many countries in terms of housing finance. A country’s housing finance system can work effectively if there is/are mortgage repayment plan(s) that would ensure flexibility in repayment of mortgage loans and encourage supply and demand for mortgage products. The study sought to find out the types and nature of mortgage repayment plans in Ghana. All the financial institutions which were into mortgage banking constituted the sample. The result shows that fixed rate method is the commonest method used in Ghana and other repayment plans have evolved from the fixed rate repayment plan. Exchange rate fluctuations, high interest rates and high house prices result in higher initial monthly mortgage repayment using the fixed rate repayment plan. It is recommended that mortgage lending institutions should reduce their interest rate for low middle income earners in Ghana to qualify for mortgage.

THE CURRENT TRENDS AND FACTORS IN THE DEVELOPMENT OF MORTGAGE HOUSING LENDING IN RUSSIA

2020 ◽  
Vol 6 (4) ◽  
pp. 320-333
Author(s):  
Natalia A. BABURINA ◽  
Alexey G. KUTSEV ◽  
Daria D. Mukhametzianova ◽  
Lilia A. Kharitonova
Keyword(s):  
Regression Analysis ◽  
Dynamic Analysis ◽  
Interest Rates ◽  
Residential Buildings ◽  
Weighted Average ◽  
Real Estate Market ◽  
Mortgage Lending ◽  
Russian Scientific ◽  
Statistical Dynamic ◽  
Lending Institutions

The presented work contributes to the development of the studies evaluating the key determinants of mortgage housing lending development in Russia. Despite a relatively well-developed body of research in the field of mortgage housing lending, devoted to revealing the essence, functional purpose, and implementation mechanism, the works, aimed at identifying the factors influencing its development in the current economic environment in Russia, are under-represented in the Russian scientific field. This study aims to assess the dynamics of mortgage housing lending in the contemporary economic conditions and to identify the determinants of its defining. The research methodology is based on the use of statistical dynamic analysis and correlation-regression analysis. The work is based on the application of methods of statistical dynamic analysis and correlation-regression analysis. Assessment of the dynamics has shown the general trend towards an increase in the volume of mortgage housing loans. However, some periods have been noted to have a negative dynamic primary related to the negative external environment and stagnation of the economy, due to the COVID-19 pandemic. Additionally, this article presents the assessment of the qualitative indicators characterizing the level of penetration and the degree of aggressiveness of lending institutions’ policies on housing mortgage lending. The authors have built a panel data model that has allowed identifying the key determinants of the development of residential mortgage lending in Russia. The results have revealed that the state of the mortgage lending sector in Russia is influenced by such factors, as the commissioning of residential buildings, the cost in the primary real estate market, weighted average interest rates, and the unemployment rate.

scholarly journals Housing Wealth or Collateral: How Home Value Shocks Drive Home Equity Extraction and Spending

2020 ◽  
Author(s):  
Henrik Yde Andersen ◽  
Søren Leth-Petersen
Keyword(s):  
Interest Rates ◽  
Mortgage Market ◽  
Housing Wealth ◽  
Home Equity ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Mortgage Debt ◽  
Individual Level ◽  
Home Value ◽  
Home Values

Abstract We examine whether unanticipated changes in home values drive spending and mortgage-based equity extraction. To do this, we use longitudinal survey data with subjective information about current and expected future home values to calculate unanticipated home value changes. We link this information at the individual level to high quality administrative records containing information about mortgage borrowing as well as savings in various financial instruments. We find that the marginal propensity to increase mortgage debt is 3%–5% of unanticipated home value gains. We find no adjustment to other components of the portfolio, and we find that mortgage extraction leads to an increase in spending. The effect is driven by young households with high loan-to-value ratios, which is consistent with the effect being driven by collateral constraints. Further, we find that the effect is driven by home owners who actively take out a new mortgage. The price effect is magnified among fixed rate mortgage (FRM) borrowers who have an incentive to refinance their loans to lock in a lower market rate. These results point to the importance of the mortgage market in transforming price increases into spending and suggest that monetary policy can play an important role in transforming housing wealth gains into spending by affecting interest rates on mortgage loans.

scholarly journals Mortgage volume and macroeconomic factors: Evidence from Turkey

2021 ◽  
Vol 9 (4) ◽  
pp. 1504-1520
Author(s):  
Tuğba Güneş ◽  
Ayşen Apaydın
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
Mortgage Market ◽  
Mortgage Loan ◽  
Response Analysis ◽  
Mortgage Loans ◽  
Macroeconomic Factors ◽  
Mortgage Interest ◽  
Mortgage Interest Rates ◽  
Turkish Lira

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

scholarly journals Evaluating Borrower's Net Yield in Long-Term Fixed Rate Mortgage Loans in Korea

2019 ◽  
Vol 4 (No. 1 Apr 2019) ◽  
pp. 1-16
Author(s):  
Seung Ryul Ma
Keyword(s):  
Interest Rates ◽  
Mortgage Market ◽  
Market Condition ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Main Hypothesis ◽  
Expected Gain ◽  
Mortgage Interest Rate ◽  
The Difference

The Korean government has tried to change the structure of residential mortgages in Korea from the short-term variable-rate non-amorting loans to the long-term fixed-rate amorting loans since the early 2000’s. This study examines he borrower’s net yield from that new type of loans, which is defined as the difference between the lender’s yield out of the borrower’s repayment and the borrower’s yield from the expected gain on the portion of housing equity funded by cosnumer. The main hypothesis tested is that the borrower’s net yield will be affected by the time of loan origination and the level of mortgage interest rate charged because the future fluctuations of housing values and that of market interest rates are expected to be key determinants. The results confirm the hypothesis in that borrower’s net yields show positive or negative values according to the time of loan start, the level of fixed loan rates, or home regions. The results documented can offer a useful information as to the financial consumers’decision on loan amount and the timing of loan application considering the housing and mortgage market condition, which in turn can provide policy implication to regulating the maximum loan-to-value (LTV) ratio regulations.

scholarly journals DO INFLATION, INTEREST RATE AND COST OF RENTING AFFECT THE PRICE OF TERRACE HOUSES IN PENANG?

2020 ◽  
Vol 18 (13) ◽  
Author(s):  
Zaemah Zainuddin ◽  
Rosylin Mohd Yusof
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Multivariate Regression ◽  
House Prices ◽  
House Price ◽  
Multivariate Regression Analysis ◽  
Middle Income ◽  
Rental Rate ◽  
Mortgage Rates ◽  
The Cost

In Malaysia, the housing ownership is reported to decrease from 85% in 1999 to 72.5% in 2010. This is due to the outstripped increase of house price over the income level and the unstable economic situation which creates unaffordability to own a house for many people. Therefore, the main objective of this study is to examine whether the price of terrace houses in Penang is being affected with fundamental factors such as inflation, interest rates and the cost of renting. This study uses multivariate regression analysis with quarterly data of terrace house prices (HPI terrace house in Penang), inflation (CPI) and interest rate (mortgage rates) from 2009: Q1 to 2016: Q4. Evidently, the cost of renting terrace houses in Penang does not have any impact on the price of terrace houses and the stable movement of cost of renting indicates that the growth of rental rate is at acceptable price for middle income earners.

scholarly journals Fixed Or Variable Rate Choice In The Commercial Bank Business Loan Market

2011 ◽  
Vol 19 (4) ◽  
Author(s):  
Manoj Athavale ◽  
Robert O. Edmister
Keyword(s):  
Interest Rates ◽  
Significant Risk ◽  
Bank Loans ◽  
Mortgage Loan ◽  
Variable Rate ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Residential Mortgage ◽  
Business Loan ◽  
Choice Decision

We study the choice available to business borrowers and lenders between fixed rate and variable rate bank loans. Unlike previous studies that examine residential mortgage loans, this analysis examines commercial and industrial loans. Business loans differ in attributes from mortgage loans and hence provide an opportunity to test determinants of the mortgage loan choice decision for other loan types. The diversity of business loans also permits tests of any effect which lender size and borrower size may have on the choice decision. Using a continuous index of preferences for the variable rate commercial loan, we find that the determinants of the business loan choice decision are different from the determinants of the mortgage loan choice decision. In contrast to prior research, we find strong evidence contradicting the proposition that variable rate loans are merely a response to high and variable interest rates. Further, this the first study to reveal size as a determinant of loan choice. Larger banks and larger borrowers have a greater preference for variable rate loans. Our results combined with the consolidation occurring among banks leads to the conclusion that the observed shift to variable rate bank loans is not transitory, and poses a significant risk for businesses with asset returns uncorrelated with short-term loan rates.

scholarly journals Cyclical and structural change in the UK housing market

2015 ◽  
Vol 8 (1) ◽  
pp. 85-103 ◽  
Author(s):  
Michael White
Keyword(s):  
Financial Crisis ◽  
Interest Rates ◽  
Housing Market ◽  
Money Supply ◽  
House Prices ◽  
Mortgage Lending ◽  
Market Liquidity ◽  
Content Type ◽  
Factors Affecting ◽  
Short Run

Purpose – This paper aims to examine factors affecting house prices separating cyclical and structural influences. In addition to considering the role of income and interest rates, it examines whether access to a key source of liquidity, mortgage finance, could affect the long-term behaviour of the market rather than being a short run impact. In addition, the paper considers whether the effects of mortgage funding and the financial crisis affect all regions equally or whether there exist particular differences across regions of the UK. Design/methodology/approach – Using quarterly time series data from 1983q1 to 2011q2, the paper employs a Johansen cointegration approach to identify the long-run (permanent) and short-run (transitory) factors affecting house prices both at national and regional levels. It identifies whether there is a separate influence for mortgage lending from interest rates and general money market liquidity, as captured by money supply M3, and whether these effects are permanent or temporary. The paper employs impulse response functions to examine house price evolution due to innovations in mortgage lending and quantifies these effects with and without the financial crisis. Findings – The findings indicate that real personal disposable income, mortgage market liquidity, interest rates and money supply as well as housing stock supply impact house prices permanently with the expected signs. The findings are broadly consistent at national and regional level, although there are some significant regional variations in results. The mean reversion of the housing markets is captured via the error correction term which is significant at the national level and in all but three regions. Impulse response functions show how house prices respond to shocks in mortgage lending and how this varies with and without a financial crisis. Research limitations/implications – The importance of mortgage lending to the housing market is a clear result from the research in addition to income, interest rate and money supply effects. One implication is that factors affecting mortgage lending supply can impact the housing market in both the short and long run. Practical implications – Given the significance of mortgage finance for house price evolution, the paper discusses how the Help-to-Buy policy may help to overcome the limitations created by the reaction of the mortgage lending sector to the financial crisis. Social implications – Access to homeownership has been limited by greater downpayment constraints introduced by lenders since 2008/2009. Policies that reduce these constraints may enable households to change to the type of tenure they prefer. Originality/value – The paper identifies the importance of mortgage lending for the housing market both nationally and regionally using an econometric approach that quantifies the role of fundamentals in both the long and short run.

International Real Estate Review

2015 ◽  
Vol 18 (2) ◽  
pp. 217-240
Author(s):  
Weida Kuang ◽  
◽  
Peng Liu ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
House Prices ◽  
Supply And Demand ◽  
Housing Prices ◽  
Consumer Price Index ◽  
Housing Price ◽  
Price Increases ◽  
Relationship Of ◽  
The Impact

In recent years, housing prices and inflation have been growing constantly in China. Higher house prices and higher inflation affect both household consumption and economic growth. We have developed a four-sector general equilibrium model of consumers, developers, firms, and the central bank to illustrate the relationship of house prices with inflation. The theoretical model demonstrates that house prices and inflation are positively correlated and endogenously determined. By using panel databases of 35 major cities in China during the period of 1996-2010, we find that the association between house prices and inflation is asymmetric. The impact of inflation on housing prices is greater than that of housing prices on inflation, which implies that housing prices effectively hedge inflation. Secondly, household income positively affects housing prices, but interest rates negatively influence housing prices. Accordingly, to curb soaring housing prices, policymakers not only should balance supply and demand, but also control for inflation. Thirdly, economic growth has less of an impact on inflation than housing prices. Hence, abnormal housing price increases are more likely to exacerbate inflation than economic growth. In addition, housing prices have a greater impact on inflation than rental prices, albeit the latter is a component of the consumer price index (CPI). Finally, money supply has much greater effects on inflation than housing prices and economic growth.

scholarly journals Comparison of housing financing products in SR

2021 ◽  
Vol 92 ◽  
pp. 06025
Author(s):  
Eva Nahalkova Tesarova
Keyword(s):  
Interest Rates ◽  
Slovak Republic ◽  
Value Added ◽  
Real Estate Market ◽  
Housing Finance ◽  
Comparison Analysis ◽  
Mortgage Loans ◽  
The Real Estate ◽  
The Real Estate Market ◽  
Analysis And Synthesis

Research background: The paper describes the comparison and subsequent analysis of products for housing finance in the Slovak Republic through the use of financial resources from banks and savings companies. The development and boom of the real estate market in Slovakia was mainly due to new forms of financing, such as mortgage loans. At present, there are various combinations of credit products on the market with favorable declining interest rates, but also support from the state in the form tax bonus on paid interests or state premium for contractual savings for housing. The development of housing loans also has a significant impact on the Slovak economy. Rising household indebtedness is a problem beyond the financial sector. Purpose of the article: Over-indebted households may have difficulty repaying loans in bad times or their consumption significantly reduce, which will exacerbate the process of resuming economic growth. The consequences of rising household indebtedness therefore need to be addressed from a wider perspective, including its economic-social impacts. The fundamental purpose of the article is to analyze the current possibilities of housing financing in the Slovak Republic and determine the most appropriate form. Methods: In order to fulfill our stated goal, we apply a method of comparison, analysis and synthesis. Findings & Value added: Finally, we formulate our own view of which form of financing housing is the most suitable based on the examined parameters.

scholarly journals Canada

2020 ◽  
Vol 21 (17) ◽  
Author(s):  
Keyword(s):  
House Prices ◽  
Safety Net ◽  
Mortgage Lending ◽  
Technical Note ◽  
Housing Finance ◽  
Household Debt ◽  
Balance Sheets ◽  
Mortgage Finance ◽  
The Government ◽  
The Cost

This Technical Note on Financial Safety Net and Crisis Management for the Canada focuses on housing finance. Housing finance is broadly resilient, but pockets of vulnerabilities exist. Mortgage finance is dominated by domestic systemically important financial institutions (D-SIFIs) and supported by the government via mortgage insurance, securitization guarantees, and other policies. With a market share of about 70 percent, D-SIFIs focus on prime borrowers, and their lending is backed by their strong balance sheets. The cost of prime mortgage financing is low and little differentiated, with credit risk being under-priced in some segments. Aspects of Canada’s mortgage finance may amplify procyclical effects of falling house prices during severe downturns. Core lenders focus on low-risk mortgage lending. In response to deteriorating household debt-servicing capacity, they may constrain new lending or renewals of maturing uninsured mortgages, potentially adding pressures on the housing market. Alternatively, a sudden adoption of risk-based pricing to accommodate financially weak borrowers might amplify household debt servicing fragility.

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