- Date : 29/04/2022
- Read: 4 mins
Getting a mortgage is more difficult for women than for men, and often they end up paying higher interest rates. Even with similar credit scores, women typically pay more for mortgages.

Generally, women find it harder to secure a mortgage than men, and they often end up paying higher interest rates. Even with similar credit scores, women end up paying more mortgages. Despite the fact that women make less money and have lower credit scores, they actually do better than men when credit characteristics are held constant.
Also Read: Best ways to improve financial security for women
You don't need to be puzzled by the data. There are obvious reasons for the same.
Let us look at different reasons why women pay higher mortgage rates than men:
1. Less understanding of the market - If you want to buy a TV for your home, you can only select the best one if you know all the parameters to evaluate different TVs. If you do not know or understand the parameters, you will be making a random guess and may or may not get the best TV. The same is the case with a mortgage. The overall financial literacy among women is lower than among men in India. The same holds true for the mortgage market. They don't understand it as much as men do. As a result, they don't look around or look for different options available in the market and end up with a high-interest rate mortgage.
Also Read: Hacks to improve your financial situation: Guide for women
2. Follow recommendations - Based on the above point; it is clear women don't do much research. In most cases, they go with the recommendation. Men never do that. They look for the lowest interest rate. The problem with the recommendation is that it does not have anything to do with the interest rate. Your friend may recommend a lender to you because the services were good. Also, your friend may have selected the lender back then because the interest rates were the lowest. Now, the lender might not be as competitive. Women go with the recommendation and hence end up paying the higher mortgage.
Also Read: Financial freedom means different things for men and women
3. Quicker decision-making - Women, in general, are faster in decision-making. Since they are not going into the mortgage details like interest rate, they just go with the first lender they came across over the internet. Or with the one with whom they already have a bank account. Men take time and check all the available options in the market to find the best rate. They would even negotiate the rates with the lender, something women never do.
4. Gender pay gap - One of the harsh realities of our society is that there is a definite gender pay gap. It means women are earning less compared to men. This leads to the following two things -
The savings and investments of women are less.
If women need to opt for a loan, they have fewer savings, so the down payment they pay against the car or home loan is lower, eventually increasing the loan tenure and the levied interest.
Banks tend to raise the mortgage rate with low disposable income and lower assets. Hence, compared to men, women get a mortgage at a higher interest rate, and eventually, they end up paying more mortgages for the same amount and tenure.
Many banks offer women better interest rates as compared to men.
One of the major reasons as to why they do this is that women have a better track record of repaying loans. While bad loans are becoming a big concern in the banking industry, banks are betting heavily on women for the expansion of their home loan portfolios. The interest rates offered to female customers by banks are typically lower than those for male customers. Additionally, female customers also enjoy a lower processing fee.
The Solution
Even though they pay a higher mortgage, the chances of defaulting on the loans are less for women. Women should follow the following simple steps that will help them get the best interest rates:
- Do your homework - Don't go with the recommendation and shortlist all the best companies for the mortgage category you plan to take.
- Check the rates - Reach out to all the shortlisted companies and check the mortgage rate they are offering. Don't shy from negotiating the rates.
We hope with the information shared here; future data will not reflect the numbers showing women are paying the higher mortgage.
Also Read: Women and money
Generally, women find it harder to secure a mortgage than men, and they often end up paying higher interest rates. Even with similar credit scores, women end up paying more mortgages. Despite the fact that women make less money and have lower credit scores, they actually do better than men when credit characteristics are held constant.
Also Read: Best ways to improve financial security for women
You don't need to be puzzled by the data. There are obvious reasons for the same.
Let us look at different reasons why women pay higher mortgage rates than men:
1. Less understanding of the market - If you want to buy a TV for your home, you can only select the best one if you know all the parameters to evaluate different TVs. If you do not know or understand the parameters, you will be making a random guess and may or may not get the best TV. The same is the case with a mortgage. The overall financial literacy among women is lower than among men in India. The same holds true for the mortgage market. They don't understand it as much as men do. As a result, they don't look around or look for different options available in the market and end up with a high-interest rate mortgage.
Also Read: Hacks to improve your financial situation: Guide for women
2. Follow recommendations - Based on the above point; it is clear women don't do much research. In most cases, they go with the recommendation. Men never do that. They look for the lowest interest rate. The problem with the recommendation is that it does not have anything to do with the interest rate. Your friend may recommend a lender to you because the services were good. Also, your friend may have selected the lender back then because the interest rates were the lowest. Now, the lender might not be as competitive. Women go with the recommendation and hence end up paying the higher mortgage.
Also Read: Financial freedom means different things for men and women
3. Quicker decision-making - Women, in general, are faster in decision-making. Since they are not going into the mortgage details like interest rate, they just go with the first lender they came across over the internet. Or with the one with whom they already have a bank account. Men take time and check all the available options in the market to find the best rate. They would even negotiate the rates with the lender, something women never do.
4. Gender pay gap - One of the harsh realities of our society is that there is a definite gender pay gap. It means women are earning less compared to men. This leads to the following two things -
The savings and investments of women are less.
If women need to opt for a loan, they have fewer savings, so the down payment they pay against the car or home loan is lower, eventually increasing the loan tenure and the levied interest.
Banks tend to raise the mortgage rate with low disposable income and lower assets. Hence, compared to men, women get a mortgage at a higher interest rate, and eventually, they end up paying more mortgages for the same amount and tenure.
Many banks offer women better interest rates as compared to men.
One of the major reasons as to why they do this is that women have a better track record of repaying loans. While bad loans are becoming a big concern in the banking industry, banks are betting heavily on women for the expansion of their home loan portfolios. The interest rates offered to female customers by banks are typically lower than those for male customers. Additionally, female customers also enjoy a lower processing fee.
The Solution
Even though they pay a higher mortgage, the chances of defaulting on the loans are less for women. Women should follow the following simple steps that will help them get the best interest rates:
- Do your homework - Don't go with the recommendation and shortlist all the best companies for the mortgage category you plan to take.
- Check the rates - Reach out to all the shortlisted companies and check the mortgage rate they are offering. Don't shy from negotiating the rates.
We hope with the information shared here; future data will not reflect the numbers showing women are paying the higher mortgage.
Also Read: Women and money