Economics, Econometrics and Finance
8 years ago

Choosing Adjustable-Rate Mortgages Could Save You Thousands in Interest Payments

Financial Review
Comparing Present Value Cost Differentials between Fixed‐ and Adjustable‐Rate Loans: A Mortgage Simulation
Michael Tucker

Paper Summary

Related papers

Economics, Econometrics and Finance
4 years ago

Rising Interest Rates Could Extend Mortgage Repayment Times by Years

Credit Expansion
Financialization
Economics, Econometrics and Finance
6 years ago

Monetary policy impact on mortgage rates varies with interest rates.

Credit Expansion
Banking Finance
Retirement Planning
Economics, Econometrics and Finance
8 years ago

New study reveals when fixed or variable rate loans are better

Real Options
Option Pricing
Monetary Models

The article compares costs of fixed-rate and adjustable-rate mortgages using a simulation. They looked at actual loan data over 50 months with different interest rates and loan durations. The choice between fixed and adjustable rates depends on how long you plan to keep the mortgage and current market conditions.