All of our empirical observations come in range into disagreement that the premium you to financial institutions charge their clients is going to be big in a situation from highest rates. Anyway, the risk of very early installment of the user grows on the interest rate just like the an ever-increasing rate of interest together with escalates the exposure, the upcoming interest rate might be lower than today’s interest rate. I attempted to explicitly try the latest hypothesis the interest rate bequeath grows on the business interest from inside the member says which have no or capped payment to possess assumption damage if there is early cost. To do so we fitted several models (perhaps not shown) to research whether or not in times from highest interest levels the mortgage banks’ interest give try highest in the countries with a high levels from user protection compared to regions which have low levels out of user security.

not, none of them designs considering show that certainly served or refute our disagreement. This is certainly considering the following causes. Earliest, we had been struggling to obtain top analysis on the refinancing costs off home loan financial institutions into the for every single European union user condition. Read more “This will trigger early installment and a matching loss so you can the lending company”