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Articles:
Expected Return of Housing and Mortgage Termination Authors: Nai Jia Lee Start Page:75 Abstract:
The prepayment risk of adjustable rate mortgages, unlike that of fixed rate
mortgages, greatly depends on the decision of mortgagors to move. Given that
housing also serves as an investment asset for the owner, it is hypothesised
that the expected capital returns of housing are likely to affect his
decision to move and hence, prepay. This paper aims to test the capital
gains hypothesis using Singapore?s housing market as a case study. In
addition, this paper also explores how the expected returns from alternative
types of housing affect the decision of households to move/prepay. The
expected returns of housing are computed in accordance with the definitions |
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