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Does Gender Affect Mortgage Choice? Evidence from the US

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  • Chau Do
  • Irina Paley

Abstract

This study examines the effect of gender on the choice of adjustable- versus fixed-rate mortgages among mortgage applicants in the United States. While adjustable-rate mortgages (ARMs) are initially cheaper, they expose the borrower to interest rate risk. Using linear probability models applied to US lender data for 2004--6, the study finds that the propensity to apply for an ARM among higher-income applicants is lower for women by 3.7--8.4 percentage points or 12--42 percent. Results are robust to the inclusion of education, financial knowledge, and economic determinants of mortgage choice. Results are consistent with past findings of women being more risk averse than men in financial behaviors. Findings of this US-based study are relevant for other countries, as ARMs of varying lengths are widely prevalent outside the US.

Suggested Citation

  • Chau Do & Irina Paley, 2013. "Does Gender Affect Mortgage Choice? Evidence from the US," Feminist Economics, Taylor & Francis Journals, vol. 19(2), pages 33-68, April.
    • Handle: RePEc:taf:femeco:v:19:y:2013:i:2:p:33-68
    DOI: 10.1080/13545701.2013.787163
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    Cited by:

    1. Eva Sierminska, 2014. "Does Equal Opportunity Bring Men and Women Closer to Wealth Equality?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 985-990, December.
    2. Grohmann, Antonia & Hübler, Olaf & Kouwenberg, Roy & Menkhoff, Lukas, 2021. "Financial literacy: Thai middle-class women do not lag behind," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).
    3. Michael Ehrmann & Michael Ziegelmeyer, 2017. "Mortgage Choice in the Euro Area: Macroeconomic Determinants and the Effect of Monetary Policy on Debt Burdens," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(2-3), pages 469-494, March.

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