The Age Gap in Mortgage Access

This paper uses data on millions of single-borrower mortgage applications to study the relationship between applicant age and mortgage application outcomes. Conditional on a rich set of applicant, property, and loan characteristics, mortgage refinance applications submitted by older borrowers are associated with higher rejection probabilities. This pattern holds within lender and across loan types. Rejection probability increases smoothly with age and accelerates in old age. The acceleration is slower for female applicants. Inability to maintain properties may contribute as older applicants are more likely to be rejected for insufficient collateral. Lastly, using the loan-level pricing adjustment identification strategy, I find similar empirical relationships between borrower age and coupon rate on home purchase and refinance mortgages that were sold to Fannie Mae and Freddie Mac. Taken at face value, age appears to be an equally important correlate of mortgage application outcomes as race and ethnicity. Overall, the results suggest that older individuals systematically face higher barriers to mortgage access. Potential explanations are discussed