Gender Equality in Mortgage Lending

Abstract

Abstract 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.