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- Title
Fixed Rate or Index-Linked Mortgages from the Borrower's Point of View: A Note.
- Authors
Statman, Meir
- Abstract
The article responds to the article "The Allocation of Risk: Some Implications of Fixed versus Index-Linked Mortgages," by Jerome B. Baesel and Nahum Biger, which appeared in the June 1980 issue. The author expands upon Baesel and Biger's model of borrower preferences of either fixed or index-linked mortgages by adding considerations of the house's value to the borrower's terminal wealth. The model also considers labor income under uncertainty, changes in the consumer price index, inflation, and the period of time over which the mortgage will be paid.
- Subjects
FORUMS; MORTGAGES; FIXED interest rates; VARIABLE interest rates; INCOME; PRICE inflation; MATHEMATICAL models of finance
- Publication
Journal of Financial & Quantitative Analysis, 1982, Vol 17, Issue 3, p451
- ISSN
0022-1090
- Publication type
Article
- DOI
10.2307/2330840