When Discounted Rates End: The Costs of Taking Action in the Mortgage Market

• 成果类型: Article
• 署名作者: Belgibayeva, Adiya; Bono, Teresa; Bracke, Philippe; Clara, Nuno; Cocco, Joao F.; Majer, Tommaso
• 署名单位: Bank of England; Duke University; University of London; London Business School; Centre for Economic Policy Research - UK
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454; 1465-7368
• DOI: 10.1093/rfs/hhaf098
• 发表日期: 2026-06
• 页码: 1700-1750
• 关键词: G21; G51; R31; Prepayment penalties; inertia; POWER

摘要

We combine administrative data with a life cycle structural model that exploits the unique features of the U.K. mortgage market to analyze the sources of inaction and to estimate borrowers' nonpecuniary remortgaging costs. The utility costs needed to generate a given level of inaction depend on monetary gains from remortgaging and on the importance of those monetary gains for agents, which in turn depend on the (endogenously determined) marginal utility of consumption. The model results reveal significant nonpecuniary costs of action that, when measured as a proportion of borrower income, are larger for the young and for lower-income households.