Mortgages Blog

Black Women Pay Higher Mortgage Rates

Accounting for Racial Discrepancies in Mortgage Rates

Black women have mortgage rates that are approximately 26.5 basis points higher on average compared to white women, according to a paper published in the July issue of the Journal of Real Estate Finance and Economics. Two of the paper’s three authors, Zhenguo Lin and Yingchun Liu, are Cal State Fullerton finance professors in the Mihaylo College of Business and Economics.

A basis point is one-hundredth of 1%. For mortgages in the 75th percentile, their research shows, the disparity between black and white women widens to about 57.4 basis points. The researchers analyzed 2001, 2004 and 2007 data from the U.S. Survey of Consumer Finance to chart the rate differences between black and white homeowners.

The study controlled for borrower characteristics (including age, education and wealth), mortgage features, consumer shopping behaviors and types of lending institutions. Continue reading.

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