China Commercial Bank Housing Mortgage Valuation Studies Under The Condition Of Interest Rate Marketization

Prior to the2008financial crisis, housing mortgage loan has been financial institutions as a low liquidity and stable cash flows, financial assets in recent years, with the irrational growth of housing prices, the growth of the housing mortgage loan business for China’s economic and social stability, a hidden trap high house prices make people mortgage to buy a house, Banks and other financial institutions of personal housing mortgage loans also increased year by year, as the U.S. subprime crisis erupted, financial institutions began to realize that once considered a high quality credit asset without risk, and hidden potential risks. In2007, the construction bank of housing mortgage loan securitization pilot work, trying to develop new ways of credit risk management. At present, China’s financial institutions, personal housing mortgage loan business excessive concentration, once the real estate market appears sharp house-price movements, financial institutions will inevitably suffer from mortgage assets value, a huge credit risk loss, even will spread to the whole financial market.Real estate regulation since2010has been four years, during this period, the house price growth slowed markedly, but the price is still high, financial institutions, credit risk management is particularly important, under the condition of considering the potential credit risk of housing mortgage loan can be reasonably accurate pricing is not only beneficial to the reasonable housing policy, also is advantageous to the lending institutions reasonably to reduce the possibility of potential losses, can also prompt exploration and implementation of the securitization of housing mortgage loan work in China.Methods of loan pricing theory of main have credit rating method, the present value of cash flow method, structured pricing method, simplified pricing method and pricing method of strength. The past pricing method is usually the default rates, house prices and other factors as exogenous variables, and the value of the loan to be estimated based on fixed interest rate model. These broad assumptions make conclusions and actual condition difference is bigger, can’t prepare for housing mortgage loan pricing. Coupled with the lack of housing mortgage loan in our country related data, makes the empirical analysis part not well validate the accuracy of the model. Along with the advancement of marketization of interest rate and the expansion of housing mortgage loan in our country, the more accurate analysis method, a more effective empirical conclusion is imminent. In this paper, on the basis of others, to further improve the strength of the traditional pricing method, and try to use more accurate data for empirical testing.This paper, using the strength analysis to our country housing mortgage loan pricing problems in theoretical research and empirical analysis. In the context of interest rate liberalization, coupled with the recent volatility of our country’s real estate market, prompted Banks and other lending institutions need to be more accurate of the housing mortgage loan pricing method to cope with the increasing of uncertainty. Article idea is as follows, first analyze the influence factors of housing mortgage loan from economic theory, and introduces the methods of the housing mortgage loan pricing, and then elaborated this article attempts to establish the mathematical model of this paper how to strength analysis method is applied to the analysis of housing mortgage loan pricing, then establish mathematical model, using historical data to estimate the model parameters, and by using the Monte Carlo simulation method makes an empirical analysis on the model and stability analysis. All data in this paper, Matlab programming, and finally to a loan interest rate is7.3%, under the law of reimbursement of principal and interest waiting for the forehead is1million10-year loan principal personal housing mortgage loans to carry on the empirical analysis, the results prove the model stability and accuracy in a reasonable scope, and draw a conclusion according to the results of the empirical analysis and puts forward policy Suggestions.This article attempts to provide a more feasible way, using historical data to estimate the mathematical economic model parameters, and then fitting out loan value of the future path, to loan pricing theory provides a new way of thinking. Now in addition to the commercial Banks in China still has a lot of financial institutions such as microfinance companies also do business of housing mortgage loan, accurately the lending pricing and risk management is particularly important. Risk management of credit business is dependent on the reasonable pricing of credit assets, if lenders can accurately define its value when loans, you can minimize the impact of the loss of its own in the future. Lending institutions to do scientific loan pricing needs not only the future more in-depth research of scholars, but also need two with the policies and measures:one is the regulation policy is not to relax;2it is to have the regulation of the marketization of interest rate, and gradually let go of the interest rate floating range.Advance of loan pricing method can better serve the securitization of housing mortgage loan, according to the Jianyuan2005-1and the running situation of Jianyuan2007-1, regulators need to enlarge the pilot of securitization of housing mortgage loan, the more the scope of urban housing mortgage loan in securitization, at the same time increase the number and scope of pilot Banks, so as to make the diversification of financial products in our country, improve the ability of financial institutions the overall transfer of risk.