Failure to refinance

• 成果类型: Article
• 署名作者: Keys, Benjamin J.; Pope, Devin G.; Pope, Jaren C.
• 署名单位: University of Pennsylvania; University of Chicago; Brigham Young University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.01.031
• 发表日期: 2016
• 页码: 482-499
• 关键词: Refinancing; Mortgage market; household finance; behavioral economics

摘要

Households that fail to refinance their mortgage when interest rates decline lose out on substantial savings. Using a random sample of outstanding US mortgages in December 2010, we estimate that approximately 20% of unconstrained households for whom refinancing was optimal had not done so. The median household would save $160/month over the remaining life of the loan, for a total present-discounted value of forgone savings of $11,500, a particularly large consumer financial mistake. To shed light on possible mechanisms, we also provide results from a mail campaign targeted at a sample of homeowners who could benefit from refinancing. (C) 2016 Elsevier B.V. All rights reserved.