Optimal Mortgage Refinancing: A Closed-Form Solution
نویسندگان
چکیده
منابع مشابه
Optimal Mortgage Refinancing: A Closed Form Solution.
We derive the first closed-form optimal refinancing rule: Refinance when the current mortgage interest rate falls below the original rate by at least [Formula: see text] In this formula W(.) is the Lambert W-function, [Formula: see text]ρ is the real discount rate, λ is the expected real rate of exogenous mortgage repayment, σ is the standard deviation of the mortgage rate, κ/M is the ratio of ...
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ژورنال
عنوان ژورنال: Journal of Money, Credit and Banking
سال: 2013
ISSN: 0022-2879
DOI: 10.1111/jmcb.12017