Article: Factors affecting borrower choice between fixed and adjustable rate mortgages.

The choice between fixed and adjustable rate mortgages can be a very confusing one for borrowers. It can also be a very costly one that could result in much financial distress if a less than optimal choice is made. Recent mortgage borrowers were surveyed to determine whether they could calculate the financial cost of mortgages and which factors influenced their choice. Insights in these areas may produce a better understanding of mortgage choice and be of use to consumer educators in helping consumers select a mortgage. Previous studies of mortgage choice (Albaum and Kaufman 1979; Brueckner and Follain 1986; Colton, Lessard, and Solomon 1979; Dhillon, Shilling, and Dirmans ...

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