			Home About us Contact

Mortgage Rates (mortgage + rate)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

UK Household Debt: A Threat to Growth or Stability?

ECONOMIC OUTLOOK, Issue 1 2005
Article first published online: 2 FEB 200
The liberalisation of credit constraints in the 1970s for UK consumers has had important implications for the housing market and consumer spending. This paper by John Muellbauer1 examines the factors that have driven soaring consumer debt and house price levels; in particular those observed since the mid-1990s. By relying on recent econometric evidence and trends in credit availability, real income per head, nominal and real after tax mortgage rates, measures of perceived risk and broad demographic trends, it also analyses the prospects for house prices, mortgage debt and unsecured debt over the coming years. The outlook is for a ,soft landing' in the housing market and associated declines in the rate of growth of consumer debt, which, although probably not smooth, does suggest the underlying situation is more benign and less crisis-prone than it was in 1988,89. [source]

Who Withdraws Housing Equity and Why?

ECONOMICA, Issue 301 2009
ANDREW BENITO
The decision to extract home equity is examined using household-level data for the UK over 1993,2003. At its peak during the period, around 1-in-10 homeowners withdraw equity per year. Little is known about this financial decision. I find that the equity withdrawal decision conforms to predictions from the standard life-cycle framework and models that predict its use as a financial buffer. The paper also estimates responses to the large house price appreciation and significant reductions in mortgage rates seen during the period. [source]

Securitization and Rate Setting in the UK Mortgage Market,

INTERNATIONAL REVIEW OF FINANCE, Issue 1-2 2008
AMELIA PAIS
ABSTRACT The objective of this paper is to investigate the way mortgage rates are set by lenders funded by deposits versus lenders funded in the capital markets by securitization. The paper tests the response of both types of lenders to changes in market rates using an Error Correction Model. The results obtained here show that the rates of lenders opting for securitization adjust slightly faster to changes in market rates, lowering borrower costs at times of falling interest rates; the difference in mark-up over the market rate is also lower on average for these lenders although it is not statistically significant. On the contrary, depository institutions seem to engage in more interest rate smoothing, confirming one of the distinctive characteristics of traditional bank lending, the provision of risk-sharing opportunities to borrowers. [source]

The Structural Relation Between Mortgage and Market Interest Rates

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2003
Achla Marathe
This paper analyzes the dynamic relationship between primary and secondary mortgage markets and the short-term and long-term market interest rates. Using a series of monthly data on fixed rate mortgage rates and GNMA rates, we explore the dependence and speed of adjustment in these primary and secondary mortgage rates to each other as well as to the long and short-term government rates. The results indicate that residential mortgage rates in general, appear to follow the long-term rate and are not very sensitive to movements in the short-term interest rate. [source]

International Comparisons on Stock Market Short-termism: How Different is the UK Experience?

THE MANCHESTER SCHOOL, Issue 2000
Angela J. Black
Using data from five major stock markets and a vector autoregression estimation procedure underpinned by the traditional intertemporal capital asset pricing model, initial evidence suggests that the UK investing community is particularly prejudiced in terms of short-termist behaviour. The observed UK myopic outlook, however, may be more apparent than real. We hypothesize that UK investors are highly sensitive to uncertainty over future cash flows,a feature which is not being captured by traditional theoretical models. Motivated by the ,option value' approach, the evidence shows that uncertainty about UK economic conditions, as proxied by the spread between mortgage rates and base rates, can go some way in explaining the reported UK anomaly. [source]