IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxviiy2024i4p890-904.html
   My bibliography  Save this article

Consumer Choice in Mortgage Loans Cross-Selling

Author

Listed:
  • Pawel Nowak
  • Katarzyna Nowak

Abstract

Purpose: Mortgage loans are offered by banks in cross-selling practices with other financial products, of which insurance is the most significant addition product. The main objective of the article was to presents the result of a study whose cognitive goal was to assess the consumer-borrower's ability to choose a home loan offer and to identifying corrective solutions that could enhance the market position of consumer-borrower in the relationship with banks. Design/Methodology/Approach: The study conducted a comparative analysis of mortgage loan offers available on the Polish market in 2022. The study included offers from the 10 largest banks: PKO BP, Bank Pekao, Santander, ING, BNP Paribas, mBank, Millennium, Crédit Agricole, Alior, and Citi Handlowy. The research apply a triangulation method combining various research techniques including interviews, document analysis, and the mystery shopper method. Findings: The results of the survey shows that consumer choice in the mortgage market is significantly restricted. The legislator recognizes the imbalance problem between consumer-borrowers and banks in the mortgage market and regulates rules of tying and bundling practices. However, current regulations remain insufficient. It seems that in this case, consumer choice would become more genuine if lawmaker introduced a minimum level of insurance cover. Reducing the variability in options would make consumer choice more realistic. Practical Implications: The application goal of the study was to formulate recommendations, the implementation of which could strengthen the position of consumer-borrowers in the bancassurance market and thereby contribute to improved efficiency and fairness in the market's operations. Originality/Value: This research reduce existing research gap by showing banks practices in offering mortgage loans together with additional products (particularly insurance). There is a need in economic literature to show the consequences of cross-selling mortgage loans and insurance products.

Suggested Citation

  • Pawel Nowak & Katarzyna Nowak, 2024. "Consumer Choice in Mortgage Loans Cross-Selling," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 890-904.
    • Handle: RePEc:ers:journl:v:xxvii:y:2024:i:4:p:890-904
    as

    Download full text from publisher

    File URL: https://ersj.eu/journal/3554/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ranyard, Rob & McHugh, Sandie, 2012. "Defusing the risk of borrowing: The psychology of payment protection insurance decisions," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 738-748.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tennyson, Sharon & Yang, Hae Kyung, 2014. "The role of life experience in long-term care insurance decisions," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 175-188.
    2. Rob Ranyard & Sandie McHugh, 2012. "Bounded rationality in credit consumers' payment protection insurance decisions: the effect of relative cost and level of cover," Journal of Risk Research, Taylor & Francis Journals, vol. 15(8), pages 937-950, September.
    3. Lunn, Pete & McGowan, Féidhlim & Howard, Noel, 2018. "Do some financial product features negatively affect consumer decisions? a review of evidence," Research Series, Economic and Social Research Institute (ESRI), number RS78.
    4. Chen, Zhiping & Yang, Peng, 2020. "Robust optimal reinsurance–investment strategy with price jumps and correlated claims," Insurance: Mathematics and Economics, Elsevier, vol. 92(C), pages 27-46.
    5. Johannes G. Jaspersen, 2016. "Hypothetical Surveys And Experimental Studies Of Insurance Demand: A Review," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(1), pages 217-255, January.
    6. Bernard, Carole & Liu, Fangda & Vanduffel, Steven, 2020. "Optimal insurance in the presence of multiple policyholders," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 638-656.

    More about this item

    Keywords

    Mortgage; collateral of loans; credit protection insurance; bancassurance; consumer protection.;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxvii:y:2024:i:4:p:890-904. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.