Can official advice improve mortgage-holders' perceptions of switching? An experimental investigation

Arbeitspapier

Encouraging consumers to seek out and switch to lower-rate mortgages is important both for the individual consumer's finances and for functioning competitive markets, but switching rates are low. We conducted an experiment with mortgage-holders to test whether official advice on how to select good mortgage products and how to navigate the switching process alters perceptions of switching. The experiment shows that the advice made consumers more sensitive to interest rate decreases and more favourable towards switching at longer terms. It also increased consumers' confidence in their ability to select good offers. The findings imply that advice from policymakers can change perceptions and increase switching rates.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ESRI Working Paper ; No. 612

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Household Saving; Personal Finance ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡
• Subject: financial decision-making ; consumer advice ; mortgages ; switching ; behavioural economics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Timmons, Shane ; Barjaková, Martina ; McElvaney, Terence J. ; Lunn, Pete
• Event: Veröffentlichung
• (who): The Economic and Social Research Institute (ESRI)
• (where): Dublin
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/193949
• Last update: 10.03.2025, 11:42 AM CET