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An empirical analysis of residential mortgage refinancing decision making

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>2010
<mark>Journal</mark>Journal of Housing Research
Issue number2
Volume19
Number of pages10
Pages (from-to)129-138
Publication StatusPublished
<mark>Original language</mark>English

Abstract

This research empirically investigates the relative optimality of several different methods of making refinancing decisions on residential mortgages. The results indicate that a simple rule of refinancing whenever the mortgage rate has dropped 1% was approximately as effective as application of an option pricing model in minimizing the cost of financing over the 1980–2007 interval.