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Gender Equality in Mortgage Lending
Author(s) -
Fang Lu,
Munneke Henry J.
Publication year - 2017
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12198
Subject(s) - prepayment of loan , default , mortgage underwriting , loan , shared appreciation mortgage , mortgage insurance , economics , moral hazard , floating interest rate , probability of default , mortgage loan , interest rate , actuarial science , monetary economics , finance , credit risk , insurance policy , microeconomics , casualty insurance , incentive
Using a sample of 30‐year fixed‐rate subprime mortgage loans, this article empirically examines whether gender inequality exists in the mortgage market, specifically whether a borrower's gender affects the loan contract rate charged, beyond the impact of the borrower's probability of default and prepayment. The results, based on a competing‐risks loan hazard model, reveal that borrowers of different genders have different loan termination patterns. After controlling for the probability of a borrower defaulting or prepaying, female borrowers pay higher contract rates in the subprime mortgage market over the study period.