Optimal mortgage refinancing
Subtitle: a closed form solution
By: Sumit Agarwal, John C. Driscoll, David Laibson.
Contributors: Driscoll, John C. 1969-; Laibson, David I.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13487.; Working paper series (National Bureau of Economic Research) -- working paper no. 13487.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 41
Subjects: Mortgage loans -- Refinancing -- Econometric models
Description: We derive the first closed-form optimal mortgage refinancing rule. The expression is derived by using the Lambert-W function to solve a tractable class of mortgage refinancing problems. We calibrate our solution and show that our quantitative results closely match those reported by researchers who use numerical methods.
Notes: "October 2007"

Includes bibliographical references (p. 31-34).

Also available in PDF from the NBER world wide web site (www.nber.org).