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Prepayment of German Bauspar-Loans: The importance of borrower and loan characteristics in predicting loan prepayment

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  • Marcus Cieleback

Abstract

A Bauspar-Loan is a second mortgageobtained after completing the saving period in a contractual savings for housing system in Germany. Using a unique Bauspar-Loan data set, consisting of 67811 Bauspar-Loans paid off or prepaid in 1998, 1999 or from January to September 2000, tests will be conducted if interest rates and borrowert characteristics affect the likelihood that a Bauspar-Loan is prepaid. Therefore, four different measures of prepayment incentives are constructed on the basis of mortgage and money market rates to find out what determines the prepayment behavior of mortgage borrowers.

Suggested Citation

  • Marcus Cieleback, 2001. "Prepayment of German Bauspar-Loans: The importance of borrower and loan characteristics in predicting loan prepayment," ERES eres2001_136, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2001_136
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    References listed on IDEAS

    as
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    2. Quigley, John M & Van Order, Robert, 1995. "Explicit Tests of Contingent Claims Models of Mortgage Default," The Journal of Real Estate Finance and Economics, Springer, vol. 11(2), pages 99-117, September.
    3. Archer, Wayne R. & Ling, David C. & McGill, Gary A., 1996. "The effect of income and collateral constraints on residential mortgage terminations," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 235-261, June.
    4. Paul Bennett & Gordon Monsen & Richard Peach & Stavros Peristiani & Jonathan Raiff, 1997. "Credit, equity, and mortgage refinancings," Economic Policy Review, Federal Reserve Bank of New York, vol. 3(Jul), pages 83-99.
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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