Want to be notified when a new article is posted? Entere your email here.

Saturday, February 26, 2005

Crooked Timber: Adjustable rate mortgages

Jack Quiggin over at Crooked Timber has an interesting piece on fixed-vs. adjustable rate mortgages. He points out that the refinancing option associated with a fixed-rate loan gives a put option to the borrower. However, a commenter to the post notes that there's a fixed cost to the option (much like a premium, although it arises from refinancing-related fees rather than an explicit up front cost).

No comments: