## Measuring Mortgage Defaults

According to a recent study the default rates for mortgages over one million dollars is nearly twice as high as the default rate for mortgages under one millions dollars (14.3% to 8.3%). A default on a mortgage essentially means that the home-owner stops making mortgage payments and the bank takes possession of the home.

There are a lot of interesting mathematical, sociological, and perhaps ethical questions here, but I wanted to point out that although the above **probabilities **are interesting, the **number **and **total value **of the mortgages in question are probably more relevant data to consider.

For example, if only 1/10 of all mortgages are over a million dollars, then this statistic might not be that important; on the other hand, if a good number of defaults are **way over a million dollars**, than this statistic isn’t telling the real story either, but in a different way.

As an aside, renting vs. owning is a general and interesting mathematical question to explore in a variety of different contexts.

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