This paper asks what factors influence the maturity choice of private mortgage borrowers and if the choice is rational. Using a unique data set from the German market with more than 50,000 financed projects, we find a significant influence of personal and macroeconomic factors. A high income, a low loan value, and a low value to income ratio lead to short maturities; so do economically good times with high GDP growth and low unemployment. In addition, we show that the importance of pricing variables is age dependent and declining for older borrowers. Moreover, we demonstrate that borrowers behave irrational and not according to the recommendations of models on optimal mortgage choice when choosing the maturity of their mortgage
