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

38 Pages Posted: 31 Jan 2013

See all articles by Ulrich Seubert

Ulrich Seubert

University of Mannheim - Department of Banking and Finance

Martin Weber

University of Mannheim - Department of Banking and Finance

Date Written: January 29, 2013

Abstract

This paper analyzes the factors that influence the maturity choice of private mortgage borrowers. Using a unique dataset from the German market with more than 40,000 mortgages we find a significant influence of pricing variables, especially of the relative pricing of a mortgage provider compared to the market average. In addition, we show that personal factors matter suggesting that risk averse borrowers and borrowers who suffer most from interest rate increases choose longer maturities. Finally, we show that mortgage brokers' advice is significantly influenced by their commission scheme.

Keywords: Household Finance, Mortgage Choice, Fixed Rate Mortgage, Adjustable Rate Mortgage

JEL Classification: D14, E40, G21, R20

Suggested Citation

Seubert, Ulrich and Weber, Martin, 5, 10, or 15: Maturity Choice of Private Mortgage Borrowers (January 29, 2013). Available at SSRN: https://ssrn.com/abstract=2208517 or http://dx.doi.org/10.2139/ssrn.2208517

Ulrich Seubert (Contact Author)

University of Mannheim - Department of Banking and Finance ( email )

L5, 2
Mannheim, 68131
Germany
+49 621 181 1536 (Phone)
+49 621 181 1534 (Fax)

HOME PAGE: http://weber.bwl.uni-mannheim.de/en/faculty/ulrich_seubert/

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
Germany
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

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