Choosing Between Fixed and Adjustable Rate Mortgages: Note

Macroeconomic factors influence on mortgage interest rate type demand

“…Alm and J. R. Follain (1987), J. K. Brueckner and J. R. Follain (1988). Since then, several contradictory views dominate in literature: 1) increasing household income lowers probability that household will choose short-term interest rates (Alm and Follain, 1987;Brueckner and Follain, 1988;Posey and yavas, 2001); 2) low income (relative to their loans) households should prefer a reduced interest rate risk, i.e., along-term fixation (Campbell and Cocco, 2003); 3) income is irrelevant given the prices and terms of the contract (Baesel and Biger, 1980), proved by empirical evidence of U. S. Dhillon et al (1987), J. Vickery (2007), M. Paiella and A. F. Pozollo (2007).…”

Assessment of fixed rate mortgage implied insurance cost: Method and ex-post Swiss market analysis

“…The first of them (Dhillon et al, 1987) threw the basis of what had been confirmed after them. According to their study, the choice between ARM and FRM is not influenced by characteristics of the borrower.…”

5, 10, or 15: Maturity Choice of Private Mortgage Borrowers

“…A more recent study was conducted by Campbell and Cocco (2003 (Dhillon et al (1987), Tucker (1989), Phillips and VanderHoff (1994), Sa-Aadu and Sirmans (1995)) and national survey data with limited information on borrower characteristics (Brueckner and Follain (1988), Boyd (1988), Phillips and VanderHoff (1991), Nothaft and Wang (1992), Paiella and Pozzolo (2007), Koijen et al (2009), Coulibaly andLi (2009)). …”