Do Women Pay More for Mortgages?


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.

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  1. 1.

    See “Mortgage; Why Women Pay Higher Interest,” by Tedeschi, B., The New York Times, January 21, 2007.

  2. 2.

    Outside the mortgage market, though, the gender issue is often studied in areas of labor and consumption. For example, Goldberg (1996) investigates the gender difference in the vehicles purchasing prices. Blau and Kahn (2000) provide an overview of gender difference in labor market outcomes.

  3. 3.

    2008–2009 Prudential Study, “Financial Experience & Behaviors Among Women”. (

  4. 4.

    See, for example, Munnell et al. (1996) and Charles and Hurst (2002).

  5. 5.

    Alternatively, we assign dummy variables for each income bracket and regress on these dummies. We find that the two alternatives produced virtually identical regression coefficients for other variables in the model, so we choose to report the results of the original approach for its easier interpretation — the estimated coefficient is the drop of basis points when borrower’s income moves up to the next bracket.

  6. 6.

    The borrower’s age does not enter the model because our analysis indicates that the impact of age on mortgage rates is statistically insignificant.

  7. 7.

    Here the coefficient of −0.7 for having credit application rejected is statistically indistinguishable from zero (never applied for credit before).

  8. 8.

    This is a point brought up by an anonymous referee, which we believe is interesting and worthy of further inquiry.

  9. 9.

    We thank an anonymous referee for suggesting us to pursue this analysis which deepens our understanding of the impact of search.

  10. 10.

    Ross and Yinger (2002) provide an excellent survey on earlier work on discrimination in mortgage pricing.


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Correspondence to Ping Cheng.

Additional information

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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Cheng, P., Lin, Z. & Liu, Y. Do Women Pay More for Mortgages?. J Real Estate Finan Econ 43, 423–440 (2011).

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  • Mortgage
  • Gender discrimination
  • Borrower behavior
  • Interest rates