alexa Abstract | Does a Rise in Mortgage Interest Rate Necessarily Increase the Burden of Buying a House?
ISSN: 2162-6359

International Journal of Economics & Management Sciences
Open Access

OMICS International organises 3000+ Global Conferenceseries Events every year across USA, Europe & Asia with support from 1000 more scientific Societies and Publishes 700+ Open Access Journals which contains over 50000 eminent personalities, reputed scientists as editorial board members.

Open Access Journals gaining more Readers and Citations

700 Journals and 15,000,000 Readers Each Journal is getting 25,000+ Readers

This Readership is 10 times more when compared to other Subscription Journals (Source: Google Analytics)

Research Article Open Access


In this paper, we demonstrate that although the housing price and house price-to-income ratio can undergo a very large rise, the burden of repaying a mortgage might decrease due to a reduction in the interest rate. In order to check if burden on house buyers increases or decreases, we suggest calculating and depicting "equal repayment curves". These curves represent a borrower's equal periodical repayment given that house prices and mortgage interest rates vary. The curves enable us to compare the burden of buying a house during a certain time period compared to a bench mark point in time. Using Israeli data, we calculated a house price indexed to income and showed that although nominal house prices during the period 2003:1-2011:4 increased by more than 66%, the burden on house buyers did not increase. These results contradict the idea held by many that reducing the interest rate necessarily makes buyers worse off due to increased house price-to-income ratio.

To read the full article Peer-reviewed Article PDF image | Peer-reviewed Full Article image

Author(s): Ben David Evyatar, Ben David Nissim and Sabbah-Amar Anne


Mortgage, Interest rate, Housing price, JEL classification code: R210, Economic Capital, Financial Economics, Hospitality Management, Industrial and Management Optimization, Innovation Policy and the Economy, Socio-Economic Planning Sciences, Economic indicator, Total Quality Management (TQM), Value based Management, Entrepreneurial Development, Management in Education, Classical Economics, Monetary Neutrality, Econometrics, New Economy, Welfare Economics, Development Economics, Economic Transparency, Globalisation, Game theory

Share This Page

Additional Info

Loading Please wait..
Peer Reviewed Journals
Make the best use of Scientific Research and information from our 700 + peer reviewed, Open Access Journals
International Conferences 2017-18
Meet Inspiring Speakers and Experts at our 3000+ Global Annual Meetings

Contact Us

© 2008-2017 OMICS International - Open Access Publisher. Best viewed in Mozilla Firefox | Google Chrome | Above IE 7.0 version