We propose a model for the endogeneous determination of an optimal refinancing policy for mortgage loans under limited refinancing opportunities. Transaction costs are also included in the analysis. A detailed examination of the optimal exercise distributions sheds light on the impact of contract features on the average prepayment behavior in mortgage-backed securities.
RONCORONI, A. et MORO, A. (2006). Flexible-rate Mortages. International Journal of Business, pp. 144-157.