Do Women Pay More for Mortgages?
Published online: 17 November 2009
Springer Science + Business Media, LLC 2009
Abstract 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.
J Real Estate Finan Econ (2011) 43:423–440
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.
P. Cheng (*)
Department of Finance, Florida Atlantic University, 777 Glades Road, Boca Raton, FL 33431, USA
Department of Finance and Economics, Mississippi State University, Mississippi State, MS 39762,
Department of Finance, Texas Tech University, Lubbock, TX 79409, USA