Choosing between Fixed and Adjustable Rate Mortgages.

The article discusses the benefits and drawbacks of both fixed and adjustable rate mortgages. Scholars have frequently thought that consumer lay in one of two groups, the first being that the consumers' characteristics had nothing to do with the mortgage terms that they were given and the other being one where information asymmetry is not an issue and that characteristics are taken into account. The article concludes that the probit discrete choice model uncovered that consumers' mortgage choices were most influenced by price.