‘Non-salient fees’ matter for mortgage pricing – BoE paper

mortgage-business

Many UK consumers seem to be less sensitive to fees charged by mortgage lenders than to interest rates, and firms appear to exploit this behaviour, a working paper published by the Bank of England finds.

In Non-salient fees in the mortgage market, Lu Liu studies pricing dynamics in the UK market, noting that while mortgage products are highly standardised, prices differ widely, as does the use of fees relative to interest rates when pricing mortgages.

Liu finds that if one assumes consumers

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: