현재 편향과 고정금리-변동금리 주택담보대출 선택

Present Bias and the Choice Between Fixed Rate Mortgage (FRM) and Adjustable Rate Mortgage (ARM)

Purpose - This study aims to develop a theoretical model exploring how present bias influences the choice between fixed-rate mortgage (FRM) and adjustable-rate mortgage (ARM). Design/methodology/approach - The model considers a two-period, discrete choice between FRM and ARM, factoring in present bias, limited attention, and expectations for future policies that could convert FRM to ARM. Findings - Present bias tends to drive borrowers toward ARM, which often offers a lower initial interest rate. Limited attention and expectations for future policy changes further encourage this present-focused decision. Together, these biases can lead to overconcentration in one type of mortgage, resulting in ex-post losses for borrowers. Research implications/originality - The findings suggest that government policies may distort risk preferences and interfere with borrowers’ decision-making. To mitigate borrower failure, the government should focus on improving financial literacy and managing expectations regarding future policy changes.