Home Loan: Women are charged more mortgage interest than men for the same property

Women's ability to obtain home loans not affected by GPG

A new study from the Urban Institute, a not-for-profit American think tank, indicates that female home buyers are charged more for their home loan, compared to a male buyer purchasing the same property. The study shows that banks often charge single women steeper interest rates when apply for a home loan, as compared to single men, even though statistics show that women generally default on their loans less than men.

home loan for women
Image credit: Wikimedia Commons


The report asserts that while the female don’t earn as much as men and have poorer credit scores, this does not explain why women are charged higher interest rates: “Looking at loan performance for the first time by gender, however, we find that these weaker credit profiles do not translate neatly into weaker performance. In fact, when credit characteristics are held constant, women actually perform better than men. Nonetheless, since pricing is tied to credit characteristics not performance, women actually pay more relative to their actual risk than do men.”

Home Loan – Women more likely to be denied a Mortgage

The study also suggest that female applicants are more likely to be denied a mortgage, as compared to their male counterparts. This finding, the report claims, is not solely one based on gender. The study finds that this is an issue concerning ethnicity and socio-economic status as well, since more than a third of single borrowers they studied are minority women and about half the women researchers studied live in low-income communities.

While the report argues that “we need to develop more robust and accurate measures of risk to ensure that we aren’t denying mortgages to women who are fully able to make good on their payments” researches decline to mention what these measures of risk could be.

Home Loan – Women’s TDSR tends to be less and impact their ability to refinance?

In Singapore, women earn only an equivalent of 72 percent of men’s wages, so there may exist some disparity between the male and female genders in terms of treatment and judgment in whatever aspects. But loaning here is largely depend on the borrower’s capacity to pay and not on gender. And we cannot infer the US figures on Singapore.

It could also be that women do not refinance home loan as regularly as men do, thereby end up paying more home loan interest cost.

A large percentage of women in Singapore are employed, which means that a large percentage of them enjoy the freedom to borrow money, obtain loans, or be part of any exclusive loan programs. Such freedom to borrow includes loan programs and financial assistance from independent and private financial organisations – and these are not just limited to credit cards but also extends to mortgage loans, even automotive financial assistance.

Mortgage statistics suggests that women are still lagging behind men when it comes to purchasing property. Statistics show that more than half of property buyers are men, with 57 percent of mortgage applicants being male and the remaining 43 percent of applicants being female.

Mortgage consultants have offered that this statistic could be due to a number of factors, such as the difference between the spending power of single men and single women. Another factor could be that women generally tend to invest more conservatively, as compared to men.

But still, if you are a woman in Singapore, so long as you have a job and credit record, getting a home loan or whatever loan you want is not really a problem.


Written by Ravi Chandran

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