Abstract
Defaults in residential mortgages could be very costly and hazardous to market stability. This paper sets out to inform homebuyers, lenders and policy makers of the determinants of default, and constructs a mortgage default model to assist them in making mortgage applications, advancing loans, or implementing policies to maintain market stability. Residential default behaviour from 1998 to 2007 is studied and a model is constructed by means of Autoregressive Multiple Linear Regression. The results show that the lag term of default rate, gross mortgage rate, current loan-to-value ratio, change in debt-to-income ratio and Consumer Price Index are positively correlated with default rate; however, property price appreciation and change in the Hang Seng Index have a negative relationship with default rate.
| Original language | English |
|---|---|
| Pages (from-to) | 647-669 |
| Number of pages | 23 |
| Journal | Housing Studies |
| Volume | 25 |
| Issue number | 5 |
| DOIs | |
| Publication status | Published - 2 Aug 2010 |
Keywords
- Autoregressive Multiple Linear Regression
- Default
- Hong Kong
- Housing market
- Residential mortgage
ASJC Scopus subject areas
- Environmental Science (miscellaneous)
- Sociology and Political Science
- Urban Studies
