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Can official advice improve mortgage-holders’ perceptions of switching? An experimental investigation. ESRI WP612, February 2019

Timmons, Shane and Barjaková, Martina and McElvaney, Terence J. and Lunn, Pete (2019) Can official advice improve mortgage-holders’ perceptions of switching? An experimental investigation. ESRI WP612, February 2019. [Working Paper]

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    Abstract

    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.

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    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > housing
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 29 Dec 2019 17:09
    Number of Pages: 29
    Last Modified: 07 Jan 2020 18:41
    URI: http://aei.pitt.edu/id/eprint/102225

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