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Fixed vs. adjustable-rate mortgages and attention

Author

Listed:
  • González-Fernández, Marcos
  • Trujillo, Francisco José Sáez
  • González-Velasco, Carmen

Abstract

The aim of this paper is to analyze the attention of households to fixed-rate and adjustable-rate mortgage loans depending on the evolution of interest rates. We hypothesize that a high level of general interest rates would lead to a higher attention to adjustable-rate mortgages. Using Google Trends tool to capture this attention, we demonstrate using VAR models that upsurges in interest rates precede a larger attention on Google searches related to adjustable-rate mortgages, but not for fixed-rate mortgages.

Suggested Citation

  • González-Fernández, Marcos & Trujillo, Francisco José Sáez & González-Velasco, Carmen, 2024. "Fixed vs. adjustable-rate mortgages and attention," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001806
    DOI: 10.1016/j.frl.2024.105150
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    More about this item

    Keywords

    Mortgage market; Attention; Fixed-rate; Adjustable-rate; Google data;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G40 - Financial Economics - - Behavioral Finance - - - General

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