Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/193760
Authors: 
de Andrés Sánchez, Jorge
Year of Publication: 
2015
Citation: 
[Journal:] Investigaciones Europeas de Dirección y Economía de la Empresa (IEDEE) [ISSN:] 1135-2523 [Volume:] 21 [Year:] 2015 [Issue:] 3 [Pages:] 148-157
Abstract (Translated): 
In adjustable interest loans the borrower assumes the risk of interest rate rising, which leads to the growth of loan annuities. Given the importance of this risk in both corporate and personal finance, it is a recurrent topic in economic and financial press. In this paper, we show that the duration of a loan with constant annuity and interest rate can be used to assess the sensitivity of payments of an analogous loan with adjustable interest rate. Also, we develop an empirical application on official indexes of the Spanish mortgage market during the period 2009-2013. We find that EURIBOR is the index that causes less volatility in the mortgage annuity. Likewise, we also obtain that the average rate of loans for house purchasing in the euro zone is the index that cause greater volatility in the payments of loans.
Subjects: 
Adjustable rate loans
Postpayable amortization
Constant annuity loan
Duration
Indexes of the Spanish mortgage market
JEL: 
D14
G12
G21
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/4.0/
Document Type: 
Article
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