Household Debt

Economic effects on households of an augmentation of the cash back duration of real estate loan ArXiv ID: 2409.14748 “View on arXiv” Authors: Unknown Abstract This article examines the economic effects of an increase in the duration of home loans on households, focusing on the French real estate market. It highlights trends in the property market, existing loan systems in other countries (such as bullet loans in Sweden and Japanese home loans), the current state of the property market in France, the potential effects of an increase in the amortization period of home loans, and the financial implications for households.The article points out that increasing the repayment period on home loans could reduce the amount of monthly instalments to be repaid, thereby facilitating access to credit for the most modest households. However, this measure also raises concerns about overall credit costs, financial stability and the impact on property prices. In addition, it highlights the differences between existing lending systems in other countries, such as the bullet loan in Sweden and Japanese home loans, and the current characteristics of home loans in France, notably interest rates and house price trends. The article proposes a model of the potential effects of an increase in the amortization period of home loans on housing demand, housing supply, property prices and the associated financial risks.In conclusion, the article highlights the crucial importance of household debt for individual and economic financial stability. It highlights the distortion between supply and demand for home loans as amortization periods increase, and the significant rise in overall loan costs for households. It also underlines the need to address structural issues such as the sustainable reduction in interest rates, the stabilization of banks’ equity capital and the development of a regulatory framework for intergenerational lending to ensure a properly functioning market. ...

The Age of Reason: Financial Decisions Over the Lifecycle ArXiv ID: ssrn-1293139 “View on arXiv” Authors: Unknown Abstract The sophistication of financial decisions varies with age: middle-aged adults borrow at lower interest rates and pay fewer fees compared to both younger and old Keywords: Household Debt, Interest Rates, Credit Markets, Life-Cycle Finance, Consumer Credit Complexity vs Empirical Score Math Complexity: 3.0/10 Empirical Rigor: 7.0/10 Quadrant: Street Traders Why: The paper uses standard econometric regression techniques to analyze large-scale financial datasets (mortgages, credit cards, etc.), which involves data processing and implementation, but the mathematical models are primarily descriptive statistics and linear regressions without heavy theoretical derivations. flowchart TD A["Research Goal: How does age influence sophistication of financial decisions?"] B["Methodology: Analysis of Household Credit Survey Data"] C["Data: Loan terms, interest rates, fees across age groups"] D["Computation: Regression & statistical comparison of outcomes"] E["Key Finding 1: Middle-aged adults secure lower interest rates"] F["Key Finding 2: Middle-aged adults pay fewer fees"] G["Conclusion: Financial decision sophistication peaks in middle age"] A --> B B --> C C --> D D --> E D --> F E --> G F --> G