| Summary: | 碩士 === 國立臺北大學 === 地政學系 === 91 === Abstract
There has been 47 banks started Adjustable-Rate Mortgage (ARM) from March of 2002 to May of 2003. ARM had replaced of basic point mortgage. What is the different between ARM and basic point mortgage？And what is the pricing behavior of ARM of financial institutions in Taiwan？Have the factors of mortgage pricing of financial institutions changed ？ These questions are government and financial institutions should be answered as soon as possible.
The article finds three results. The First, ARM and basic point mortgage basically are the same. However, the index and adjusted frequency of ARM are fixed, and the information of ARM is so public that financial institutions couldn’t control it easily. Comparing with foreign financial institutions, there is no different in ARM contract significantly in Taiwan, and it lacks some terms like negative, caps of rates etc. The Second, the article uses questionnaire surveyed from 123 financial institutions, which is analyzed with Fisher's exact test. The research finds that local banks and financial institutions which carry out ARM consider that default risk of ARM is more than basic point mortgage. As for prepayment risk is a potential danger.
The pricing goals of domestic financial institutions are many to will avoid refinancing from old borrowers, but other financial institutions are more for pay attention to promoting the market share. Besides, financial institutions in Taiwan consider that there is no different significantly in index, add to the adjusted frequency of ARM almost for three months, which implies competition-oriented pricing behavior is really happened.
The third, because of ARM mostly regards the interest rate of the Certificate of Deposit as index sign, the financing institutions order the consideration of the price to is not only have the change, the competition of the market but even an important key. Besides, the initial rate and margin are positive relationhsip, which is not the same with Green & Shilling (1997). Perhaps financing institutions take two terms of pricing to see as the principal axis of market competeion, so both joint to tread to ascend and descend, as for cost then pass on other fees. Finally the article suggests that financing institutions should control risks properly, and try to design the project of the mortgage of different types.
Key word: Adjustable-Rate Mortgage, Pricing Behavior, Prepayment & Default risk, Fisher’s exact test
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