cycles. The decision to buy or rent a durable, financially significant asset is a difficult one for both experts and amateurs … simulation suggests that the amortization scheme known as SAC for the mortgage system is a better choice in nearly two-thirds of … should acknowledge this level of uncertainty by including explicit mortgage renegotiations within shorter periods. …

mortgage design interact with monetary policy? We answer these questions using a quantitative equilibrium life cycle model with … policy. Designs that raise mortgage payments in booms and lower them in recessions do better than designs with fixed mortgage … reductions over the life of the mortgage. Front-loading alleviates household liquidity constraints in states where they are most …