Female mortgage borrowers get the worst deals
Women get a raw deal on mortgages in nearly every corner of the country, a new analysis of federal data found. Compared with single male borrowers, single female borrowers pay higher rates that add up to thousands of dollars in additional costs.
That’s according to research by mortgage startup Own Up, which used Home Mortgage Disclosure Act data to compare mortgage rates paid by single women to those paid by single men applying for loans. Women paid more in every state except Alaska, Own Up found.
The research points to another area where a gender gap places women at an economic disadvantage. The wage gap has been widely reported, along with the reality that women pay more for cars than men.
Despite decades of regulatory efforts to erase discrimination from the housing industry, the “pink tax” extends to mortgages, too, says Patrick Boyaggi, chief executive and founder of Own Up. “Unless it’s totally equitable, where men are getting the same rates as women, it’s not right, and it’s got to change.”
Where women get the worst deals
Many mortgages are made to married couples, but Own Up examined rates paid by single borrowers only. Based on a mortgage amount of $345,000, here’s where women would pay the most:
1. Mississippi. The typical female borrower in the state pays an average of 3.47% compared with 3.37% for men, a gap of 10 basis points that amounts to $7,077 over 30 years.
2. Alabama. Women pay an average of 3.44% versus 3.36% for men, totaling $6,006 over 30 years.
3. Ohio. Female borrowers typically pay 3.42% compared with 3.34% for men, totaling $5,856 over 30 years.
4. Florida. Women pay an average of 3.46% versus 3.38% for men, totaling $5,591 over 30 years.
5. New Jersey. Women pay an average of 3.26% compared with 3.18% for men, totaling $5,515 over 30 years.
Where women get the best deals
Here’s where women pay the least in additional interest costs:
1. Alaska. The typical female borrower in the state pays an average of 3.21% compared to 3.23% for men, a gap of 2 basis points that amounts to $1,656 over 30 years.
2. Maine. Women pay an average of 3.37% compared with 3.36% for men, totaling $564 over 30 years.
3. Wyoming. Female borrowers typically pay 3.29% versus 3.28% for men, totaling $701 over 30 years.
4. Montana. Women pay an average of 3.31% compared with 3.3% for men, totaling $702 over 30 years.
5. Oregon. Women pay an average of 3.33% compared with 3.31% for men, totaling $1,124 over 30 years.
The importance of shopping
Own Up’s research focused on purchase mortgages, so it’s unclear if women also pay more than men for refinances. However, the fresh findings underscore the importance of comparison shopping, whether the mortgage is for a purchase or a refi.
An earlier study by the Urban Institute likewise concluded that women pay more than men for mortgages to the tune of 7 basis points. That study found a more modest premium for women – only about $150.
“Female-only borrowers pay more for their mortgages, both because they have generally weaker credit characteristics and because a higher percentage of these mortgages have been subprime,” the Urban Institute reported.