Risk pricing on residential mortgages in the UK

Lee, D. , Orr, A. and Pryce, G. (2010) Risk pricing on residential mortgages in the UK. In: CCHPR 20th Anniversary Conference: Housing – the next 20 years, Cambridge, 15-16 September 2010, (Unpublished)

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Publisher's URL: http://www.cchpr.landecon.cam.ac.uk/


This paper investigates three questions. First, what does economic theory tell us about the likely approach of mortgage lenders to risk pricing - how should we expect the interest rate charged to different mortgage borrowers vary with the risk of default? Second, is risk pricing desirable – should governments intervene to promote or discourage it? Third, is the anticipated behaviour borne out by the evidence on new residential mortgages in the UK? We explore the third question using a large datasets of UK mortgage originations, and control for spatial effects, choice of mortgage product and variation in behaviour across lenders.

Item Type:Conference Proceedings
Glasgow Author(s) Enlighten ID:Lee, Professor Duncan and Orr, Dr Allison and Pryce, Professor Gwilym
Authors: Lee, D., Orr, A., and Pryce, G.
College/School:College of Social Sciences > School of Social and Political Sciences > Urban Studies

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