Health uninsurance premium and mortgage interest rates

Balbinder Singh Gill

International Review of Financial Analysis, 2023, vol. 87, issue C

Abstract: I show that lenders charge higher interest rates on mortgage-financed houses in areas with a higher rate of health uninsurance to protect themselves against a potential future bankruptcy of the borrower caused by health uninsurance. The health uninsurance premium is higher for applicants who are more likely to file for bankruptcy and for mortgage-financed houses in areas where there are greater benefits to obtaining insurance or where there is a higher percentage of uninsured people who cannot afford insurance. The premium is lower following the implementation of the requirement to have qualifying health insurance coverage under the Affordable Care Act.

Keywords: Mortgage interest rate; Household finance; Health uninsurance risk premia (search for similar items in EconPapers)
JEL-codes: E43 G21 I13 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:87:y:2023:i:c:s1057521923001631

DOI: 10.1016/j.irfa.2023.102647

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