The Power is Now

Women Pay Higher Mortgage Rates in 49 States

Stressed and overwhelmed young woman

The U.S may be a free land where most people come to chase their dreams but at the same time it comes with a lot of wonders. Besides the racial disparities that are deeply rooted in the land, gender disparities are there too especially in the housing industry. This follows after it was recently established that even in the 21st century, women in some parts of the US pay more for mortgages than men when buying a house.

Own Up, a mortgage comparison site, analyzed Home Mortgage Disclosure Act (HMDA) data and found out that women pay more for mortgages in 49 out of the 50 US states. Alaska is the only exception. On the other hand, single women in Mississippi paid an average of 3.47% on a 30-year conventional fixed-rate mortgage in 2019, while single men on average paid 3.37%, according to data from HMDA. This means that single women in Mississippi paid roughly $7,000 more in mortgage payments compared to single men over the lifespan of the loan.

According to Patrick Boyaggi, CEO and founder of Massachusetts-based lending startup OwnUp, this issue hasn’t drawn enough attention in the mortgage space.

“The latest HMDA data makes it startlingly clear – women are largely being left out of the conversation,” Boyaggi said. “Recent HMDA data confirms that discrimination in the home-financing process is very real.

The main reason? Many female borrowers simply fail to shop around for the best possible rate, which translates into losing thousands of dollars over the total life of their loan.”

Boyaggi, however, admits his analysis is not exactly revelatory, and his intention is not to determine all the reasons women pay more. According to him It’s more important to acknowledge there’s a problem and take action.

“I am not certain everybody is aware of it or believes it’s a real issue,” Boyaggi said. “We believe it is a systemic-wide problem…women are not being treated fairly…For us, it’s really about it not being 50-50. And therefore, it’s a systemic problem. Let’s bring that to light first and let’s start worrying about the solutions versus trying to nitpick as to why it is an issue. It is an issue. We know it’s an issue. How do we make it better, versus trying to justify it or come up with some kind of rationale for it.”

The analysis of the HDMA data revealed five states where women pay more on mortgage which included Mississippi (delta of $7,077 over the course of the mortgage), Alabama (delta of $6,006), Ohio (delta of $5,856), Florida (delta of $5,591) and New Jersey (delta of $5,515).

The analysis also established that single women paid an average of 3.21% while single men paid 3.23% in Alaska. The four other best states where women were not overpaying so much on mortgages were Maine, Wyoming, Montana and Oregon, where single women paid between 1 and 3 basis points more on mortgage rates than single men.

Elsewhere, another 2016 Urban Institute (UI) study revealed that single women were better at settling their mortgages compared to single men, despite the rate difference. The study also established that single women borrowers are more likely to be minorities, from poorer areas, and often have a mortgage loan that takes a big share of their income.

What causes this?

“One possible explanation is that women, particularly minority women, experience higher rates of subprime lending than their male peers,” the UI study said. “Another explanation is that women tend to have weaker credit profiles. We find that both these explanations are true and largely account for the higher rates.”

Asked the possibility of biasness against women borrowers, Guy Cecala, CEO of Inside Mortgage Finance, in an interview with Wharton Business Radio in 2016 revealed that there ‘can be.’

“The mortgage market prides itself on being color blind, and essentially using a black box, but any sort of black box basically discriminates against single borrowers, lower-income borrowers and borrowers with lower credit scores. If those happen to be predominantly women, you have to assume that they are getting that kind of treatment from the mortgage market.”

What’s the solution?

According to Boyaggi, more awareness simply needs to be raised.

“There’s a lot of things that happen in this industry where if you just looked at it you’d be like, ‘Oh 10 basis points, .010%. What are we talking about?’” he said. “But if you were to say, ‘Hey, this gas station charges women 10 cents more than men,’ we would be in an uproar. There would be stories about it everywhere, right? People would vilify that gas station, and rightly so.”


Work cited.



own shows