Same-sex couples are a lot less likely to be approved for a mortgage, and when they do get one, they often pay more.
This is according to a study from the Iowa State University, which analyzed 30 million mortgages originated from 1990 to 2015 and found that same-sex couples are 73% more likely to be denied a loan than male-female couples.
And, on average, their fees amount to less than 0.5% more. While that might not seem like much, the researchers point out that collectively, that bump in fees equates to $86 million a year.
“Lenders can justify higher fees, if there is greater risk,” said Assistant Professor Lei Gao. “We found nothing to indicate that’s the case. In fact, our findings weakly suggest same-sex borrowers may perform better.”
While the researchers note that mortgage applicants are not required to disclose their sexual orientation, the perception that lenders may make judgements based on their biases is damaging. They also state that the Fair Housing and Equal Credit Opportunity acts do not no explicitly include language against discrimination based on sexual orientation.
The researchers also said their findings revealed that the percentage of LGBT homeowners in a neighborhood contributed to a disparity in approval rates. In neighborhoods with more same-sex couples, both same-sex and different-sex borrowers experienced more unfavorable lending outcomes.
“Policymakers need to guarantee same-sex couples have equal access to credit,” said Hua Sun, associate professor and the co-author of the study. “Using our framework, credit monitoring agencies also can take steps to investigate unfair lending practices.”