Dealing with an anchoring bias in the mortgage market: a regulatory approach

Nelson Camanho, Ronit Levine-Schnur*, Tal Farber

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

2 Citations (Scopus)


This chapter investigates whether mortgage regulation assures proper decision-making by borrowers. It offers regulatory responses to mitigate a “mortgage illusion” phenomenon revealed in recent experimental studies. According to these experiments, buyers are influenced by the comparison between the monthly rental payment and the monthly mortgage installment for fixed-rate mortgages. Therefore, consumers are more likely to buy a house when the rent is higher than the mortgage installment. The chapter suggests that regulators account for this phenomenon when designing mortgage policies.

Original languageEnglish
Title of host publicationMeasuring the effectiveness of real estate regulation
Subtitle of host publicationinterdisciplinary perspectives
EditorsRonit Levine-Schnur
Place of PublicationCham
PublisherSpringer International Publishing
Number of pages14
ISBN (Electronic)9783030356224
ISBN (Print)9783030356217
Publication statusPublished - 1 Jan 2020
Externally publishedYes


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