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Studies On The Prepayment Issue About Chinese Housing Mortgage Loans

Posted on:2009-01-17Degree:MasterType:Thesis
Country:ChinaCandidate:Z H ZhaoFull Text:PDF
GTID:2189360272470339Subject:Economic Systems Analysis and Management
Abstract/Summary:PDF Full Text Request
Variable interest rate mortgage is implemented in China;it will increase borrower's interest cost that the interest rate raises,rational borrower will choice prepayment,since the interest rate increase firstly in 2004,It has been more and more frequent that the interest rate increase,it reached a peak until 2007,in such a short span of one year,the number of increasing interest rate was as much as five times,in the background of a tight monetary policy,the prepayment rate suddenly increased.The high proportion of prepayment brought about negative impact,troubled commercial banks seriously and brought great difficulties to their day to day management.Therefore,the factors of prepayment behavior,the impact on various aspects and prepayment risk management are all problems that need to be resolved, this study has important significance.The paper considers mortgage loans value as main line of study,exposes prepayment risk's impact on housing mortgage loan value,so as to grasp characteristics of mortgage prepayment risk in China,by which paper advises forecast way and management methods of the prepayment behavior,It is hoped that these can play a guiding role on commercial banks' managing prepayment risk and borrowers' making prepayment decisions.The paper will consider standardized analysis as major research ways,see finance projects and fixed-income securities theory as the guide,and have a deep understanding of Chinese housing mortgage loans prepayment behavior through qualitative and quantitative analysis.Furthermore,it creates prepayment model through using quantitative analysis method,so as to analyze Chinese housing mortgage loans prepayment risk characteristics.And it analyses housing mortgage loans value through using options pricing method,fixed-income securities theory and probability theory and so on.The paper draws the following conclusions:(1) The main factors of prepayment are income and interest rate in China,which are both direct proportional relationship with prepayment.We can obtain separately income threshold point n~* and interest rate threshold R~* by using the relation model between prepayment and income and the relation model between prepayment and interest rate.There will be a one-time prepayment only whenR,>R~* and the time point is after n~* point; (2) The prepayment changes loans value by changing cash flow of the housing mortgage loan.The cash flow of housing mortgage loans without prepayment is constant(A),however, the cash flow interrupt from a certain time point after prepayment appearing,so,the discounted cash flow value takes place significant changes;(3) Charging default fine is a key method of prepayment risk management,moreover,we should charge default fine at a reasonable rate,otherwise,it will cause the loss of social welfare,applying the striking formula of default fine rate that the article raised,at the same time,It needs attention that how those factors such as prepayment time,the prepayment amount and the type of loans impact on determining default fine rate.
Keywords/Search Tags:Chinese Housing Consumption Loans, prepayment, default fine, income, Interest rate
PDF Full Text Request
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