In many countries a mortgage shall be completely redeemed to the end of its duration and may be refinanced anytime. In USA one additionally can foreclose his mortgage by mailing his house-keys to a bank. In Germany is different.
First of all, one may completely refinance a mortgage only after 10 years (otherwise one have to pay Vorfälligkeitsentschädigung - a compensation to a bank for missed interest). But taking a long-term mortgage (20 or 30 years) implies a higher mortgage rate, thus it is not uncommon to take several consequent 10- (or sometimes even 5-) year mortgages. In order to optimize mortgage costs / rate change risk relation one can take several submortgages with different durations. Last but not least there is no requirement to amortize a mortgage completely: normally one refinances the residual debt (Restschuld) with a follow-up mortgage (Anschlussfinanzierung).
In this post we discuss the challenges of mortgage optimization and show how two popular programming languages - R and Python - can help us together Continue reading "Interbreeding R and Python to Give Birth to an Optimal German Mortgage"
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