Journal of Financial and Quantitative Analysis Vol. 59 No. 5 2024
Refinancing Inequality During the COVID-19 Pandemic
Abstract
During the first half of 2020, the difference in savings from mortgage refinancing between high- and low-income borrowers was 10 times higher than before. This was the result of two factors: high-income borrowers increased their refinancing activity more than otherwise comparable low-income borrowers and, conditional on refinancing, they captured slightly larger improvements in interest rates. Refinancing inequality increases with the severity of the COVID-19 pandemic and is characterized by an underrepresentation of low-income borrowers in the pool of applications. We estimate a difference of $5 billion in savings between the top income quintile and the rest of the market.
- DOI
- 10.1017/s0022109023001059
- Volume
- 59
- Issue
- 5
- Pages
- 2133-2163
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex