Do Women Pay More for Mortgages?

Ping Cheng, Zhenguo Lin and Yingchun Liu

Online First™, 17 November 2009


This paper documents women on average pay more for mortgages than men. The disparity cannot be fully explained by traditional variables such as mortgage features, borrower characteristics, and market conditions. While the persistence of gender disparity may suggest discrimination, we offer a different explanation: women pay higher rates because they are more likely to choose lenders by recommendation while men tend to search for the lowest rate. Our empirical test confirms that search effort is rewarded in marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills.Keywords  Mortgage – Gender discrimination – Borrower behavior – Interest rates

We wish to thank Editor James Kau at Journal of Real Estate Finance and Economics and Paul Obrecht at Fannie Mae for their insightful comments and suggestions. We also want to thank an anonymous referee whose comments helped us to improve the paper greatly. All errors remain our own.
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