Subprime Market

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Dictionary Says

Definition of 'Subprime Market'

The market for lenders and borrowers of subprime credit, a credit that is lent to people of questionable or limited credit histories. Includes the business of subprime mortgages, subprime auto loans and subprime credit cards, as well as various securitization products that use subprime debt as collateral.

Subprime borrowing comes with a higher interest rate than for borrowers with good credit ratings, as the risk of default is much higher.
Investopedia Says

Investopedia explains 'Subprime Market'

The subprime market can be a profitable one for lenders as they can demand higher interest rates, and as long as borrowers are able to repay their loans. Subprime lending is also less susceptible to interest rate swings because subprime borrowers usually don’t have the option to refinance debt until their credit rating improves.

The health of the subprime market is highly dependent on the strength of the overall economy; if people can generally find work and earn a decent wage, they are more likely to repay their debts. Subprime lending can dry up very fast in a weakening economy, as lenders collectively will avoid taking excess credit risks.
Search results for

'Subprime Market'

  • The Fall Of The Market In The Fall Of 2008

    http://www.investopedia.com/articles/economics/09/subprime-market-2008.asp
    ... While many saw great prosperity as the subprime market began to explode, others
    began to see red flags and potential danger for the economy. ...

  • How Will The Subprime Mess Impact You?

    http://www.investopedia.com/articles/pf/07/subprime-impact.asp
    ... Size of the Subprime Market To get an idea of the total direct impact of the subprime
    lending crisis, we will take a look at its size and make an estimate of ...

  • CDOs And The Mortgage Market

    http://www.investopedia.com/articles/07/cdo-mortgages.asp
    ... (To learn more about the subprime market and its meltdown, see our Subprime Mortgage
    Meltdown feature.) If a buyer of a CDO thinks the underlying credit risk ...

  • Who Is To Blame For The Subprime Crisis?

    http://www.investopedia.com/articles/07/subprime-blame.asp
    ... Investment Banks Worsen the Situation The increased use of the secondary mortgage
    market by lenders added to the number of subprime loans lenders could ...

  • The Fuel That Fed The Subprime Meltdown

    http://www.investopedia.com/articles/07/subprime-overview.asp
    ... We are currently knee-deep in a financial crisis that centers on the US housing
    market, where fallout from the frozen subprime mortgage market is spilling over ...

  • The 2007-08 Financial Crisis In Review

    http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp?partner=aol-d
    ... Investments and the Public Problems in the subprime market began hitting the news,
    raising more people's curiosity. Horror stories started to leak out. ...

  • Mark-To-Market Mayhem

    http://www.investopedia.com/articles/financial-theory/08/mark-to-market-mayhem.asp
    ... That's because the fair value of its subprime mortgages became increasingly difficult
    to calculate when the mortgage market began to dry up in 2007. ...

  • The 2007-08 Financial Crisis In Review

    http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp
    ... Investments and the Public Problems in the subprime market began hitting the news,
    raising more people's curiosity. Horror stories started to leak out. ...

  • Dialing In On The Credit Crisis

    http://www.investopedia.com/articles/financial-theory/08/credit-crisis-mortgages-iphone.asp
    ... However, investors were interested in the subprime market's higher interest rates,
    because their investors could earn more money on those loans than on a ...

  • Subprime Casualty List

    http://stocks.investopedia.com/stock-analysis/2007/Subprime_Casualty_List.aspx
    ... point. The Bottom Line There is turmoil in the subprime sector of the market,
    and we may continue to see aftermath for a while. I ...

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