Same-sex couples are much less likely to be approved for a mortgage than heterosexual couples, according to a new study by researchers at Iowa State University’s Ivy College of Business, which was published in the Proceedings of the National Academy of Sciences.
The researchers found that same sex couples’ approval rate for a mortgage was between 3% and 8% percent lower than that of their ‘straight’ counterparts.
The study, which looked at national mortgage data from 1990 to 2015, also factored in applicant’s work histories and credit scores to see if denial rates for same-sex couples were still higher. They found that throughout the 25-year period, same-sex couples were a staggering 73% more likely to be rejected.
The bias goes further than that too, with the researchers finding that those same-sex couples who were approved had to pay fees and interest averaging around 0.5% more than heterosexual couples.
Despite this, the researchers concluded that there was no higher risk that same-sex couples might default on a loan.
“Lenders can justify higher fees, if there is a greater risk,” said Lei Gao, co-author and assistant professor of finance at Iowa State University. “We found nothing to indicate that’s the case.”
In actual fact, Gao said his team’s findings indicated that same-sex borrowers may perform better.
The odd thing is that mortgage applicants aren’t required to disclose their sexual orientation. But still, when a same-sex couple applies together it can be obvious in any case. And the researchers say perception is “just as damaging in terms of discrimination”.
The Fair Housing Act and Equal Credit Opportunity Act prohibit discrimination based on a borrower’s race, gender, marital status, or religion. It does not specifically list sexual orientation.
The researchers said that their findings should raise enough concern to warrant further investigation.