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https://hdl.handle.net/2440/106603
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Type: | Journal article |
Title: | Mortgage choice determinants: the role of risk and bank regulation |
Author: | Dungey, M. Doko Tchatoka, F.S. Wells, G. Yanotti, M. |
Citation: | The Economic Record, 2015; 91(295):417-437 |
Publisher: | Wiley Blackwell |
Issue Date: | 2015 |
ISSN: | 0013-0249 1475-4932 |
Statement of Responsibility: | Mardi Dungey, Firmin Doko Tchatoka, Graeme Wells and Maria B. Yanotti |
Abstract: | We shed new light on the role of borrower characteristics in mortgage product choice, and how these are impacted by regulatory capital requirements. Using rich loan-level data from the Australian market, we analyse the borrower idiosyncratic risk effects on the choice between variable-rate mortgages and other mortgages with reduced initial payments. We find that income, wealth and mobility risks play a role in product choice. We investigate regulatory capital requirements in a market where banks hold mortgage risk on balance sheet and find that the Basel capital discounts based on loan-to-valee ratios divide otherwise similar borrowers in their mortgage choices. |
Rights: | © 2015 Economic Society of Australia |
DOI: | 10.1111/1475-4932.12205 |
Grant ID: | http://purl.org/au-research/grants/arc/DP120100842 |
Published version: | http://dx.doi.org/10.1111/1475-4932.12205 |
Appears in Collections: | Aurora harvest 8 Economics publications |
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