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Is there a standard model (or way of modelling) different types of mortgages and different interest rates to find the optimal mortgage structure for home loans?

e.g. a loan of $800k structure across 20, 25 or 30 years at varying interest rates

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  • $\begingroup$ There are plenty of mortgage calculators online (and formulas for spreadsheets), but I'm guessing you're asking something different? $\endgroup$ – barrycarter Feb 24 '16 at 0:59
  • $\begingroup$ Ideally I'm interested in something that can evaluate multiple scenarios and structures to determine what the best outcome is. I.e Fix for 1 year float for the rest vs fix for 1 and 3 years then float $\endgroup$ – cranz Feb 24 '16 at 3:03
  • $\begingroup$ If you have a tree (example expertsmind.com/CMSImages/…) of future interest rate scenarios (subjective or constructed from an interest rate model) then you can compare the various structures. $\endgroup$ – noob2 Feb 24 '16 at 15:01
  • $\begingroup$ I think the real difficulty here would be in predicting future rates. Do you have some way of modelling this that you feel is reasonably accurate? $\endgroup$ – barrycarter Feb 24 '16 at 16:28

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