Do Older Homeowners Pay More for Mortgages?


The brief’s key findings are:

  • A prior brief found that older mortgage applicants are more likely to be denied. The focus here is whether older homeowners pay more on loans.
  • The analysis controls for borrowers’ credit risk using the fees that Fannie Mae and Freddie Mac charge lenders to insure against default.
  • The results show that older homebuyers paid higher interest rates, but only up to 8 basis points more on a base cost of 391 basis points.
  • One possible explanation for the interest rate gap is that older borrowers might do less comparison shopping for lower rates.

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