The Problem of Front-end Loading and Disorder in the Housing Market
AbstractThe paper asks why indexation of debits is not typically observed in the UK housing market. Indexation ensures that real debits change only if the real rate of interest alters and eliminates the problem of front end loading or the tilt. The typical British repayment mortgage and the index linked alternative are just two special cases of a more general repayment schedule. A measure of front end loading, which compares the real value of debt with the index linked alternative over the term of the loan, is described. Neither of the two special cases need correspond to the ideal degree of front end loading.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Economic Issues in its journal Economic Issues.
Volume (Year): 6 (2001)
Issue (Month): 1 (March)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Goodman, Allen C. & Wassmer, Robert W., 1992. "Optimal mortgage design when transaction costs constrain mobility," Journal of Housing Economics, Elsevier, vol. 2(1), pages 17-36, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dan Wheatley).
If references are entirely missing, you can add them using this form.