Calculating Mortgages

CalMo - Calculating Mortgages

Cognitive factors and design features that affect understanding of online information associated with financial products: the mortgage case

Cognitive factors and design features that affect understanding of online information associated with financial products: the mortgage case

Financial literacy has become increasingly important for citizens. Due to technological developments and deregulation of markets, individuals have direct access to a large variety of financial products and transactions and have to take major financial decisions on their own. However, financial products (e.g. credits, mortgages, pension plans) are often complex and difficult to understand.

The purpose of the project is to investigate how costumers, who wish to purchase a mortgage, deal with online-information provided on the web. In general these webpages provide dynamic, nonlinear access to a wide range of information, presented as text, tables, graphics, or videos. Users are easily overwhelmed and distracted by this abundance of information and lack self-regulatory skills to process the information appropriately. We therefore concentrate on two factors that we expect to affect the way how users navigate, process, and understand online information about mortgages. The first factor concerns the design of the webpage. This includes the multimedia design of the webpage and the clarity and structure of the particular text information. The second factor relates to how people process the information presented on the webpage, e.g. whether they use cognitive and metacognitive strategies. We expect that this project helps to identify factors that impede and facilitate understanding of financial products in informal settings and thereby helps to refine the theoretical basis for the concept of financial literacy.

Project partner:

For this project we collaborate with the University of Santiago of Chile, Faculty of Management and Economics, and the Department for Psychology in Education, Faculty of Psychology and Sport Studies, Muenster University. The initiation of the international collaboration is supported by German Research Foundation.

Project duration:

March 2014 until February 2015

Contact: Prof. Dr. Bärbel Fürstenau, Dr. Mandy Hommel

Dr. Mandy Hommel Prof. Dr. Bärbel Fürstenau