Determinants of purchase intention, satisfaction, and risk reduction: The role of knowledge and information search among mortgage buyers

Figures & data

Figure 1. Theoretical framework.

Table 1. Demographic profile

	Frequency	Percent
Gender
Male	365	65.9
Female	184	33.2
Did not disclose	5	0.9
Total	554	100
Occupation
Salaried	390	70.4
Self-employed	162	29.2
Did not disclose	2	0.4
Total	554	100
Property Type
Detached House	47	8.5
Apartment	350	63.2
Home extension	82	14.8
Plot of land	75	13.5
Total	554	100
Loan amount (in lakhs)
Mean	28.1
Median	25
Minimum	2
Maximum	150
Loan to value
Mean	0.61
Median	0.56

Adapted from survey data.

Table 2. Factor loadings and reliability assessment

Construct	Measurement Items	Factor Loading
Product Complexity (Heitmann et al., 2007) (Composite reliability 0.93, Cronbach’s alpha 0.86)	The bank offerings in home loans were difficult to understand (Fixed, Floating Rate, Schemes, MCLR)	0.94
	The number of product features in Home Loans was overwhelming. (Interest rate, Processing fees, legal, technical, down payment)	0.93
Perceived Risk (DelVecchio & Smith, 2005) (Composite reliability 0.92, Cronbach’s alpha 0.89)	Considering the investment involved, purchasing a Home loan is risky.	0.84
	Given the financial expenses (Interest, EMI, Fees) associated with purchasing a Home loan, there is substantial financial risk.	0.83
	I worry about the cost of purchasing a Home loan	0.87
	Given the financial commitment, I may regret purchasing a Home loan	0.82
	I could lose a significant amount of money if I ended up with a Home loan that did not work. (Delayed payments, poor service)	0.82
Involvement in purchase decision (Kim & Sung, 2009) (Composite reliability 0.88, Cronbach’s alpha 0.81)	I cared a lot about selecting the Bank from many other choices available in the market	0.83
	It was very important for me to make the right choice of Bank from the market	0.88
	When selecting the Home loan bank or finance company, I was very concerned about the outcome of my choice	0.83
Perceived Search benefits (Srinivasan & Ratchford, 1991) (Composite reliability 0.89, Cronbach’s alpha 0.84)	I learned which Home loans are suitable for me by shopping around	0.84
	Shopping around at various banks and Housing finance companies helped me to find the lowest price (interest rate, EMI) when I bought my Home loan	0.8
	I got exactly what I wanted by searching enough before I bought my Home Loan	0.74
	By searching for more information about home loans, I am certain of making the best buy.	0.88
Number of internet sources used (Dawes et al., 2009), Single item	How many internet sites did you enquire from when you were shopping for the home loan?	1
Knowledge (Laroche et al., 2005) (Composite reliability 0.92, Cronbach’s alpha 0.9)	My knowledge of Home loans is better when compared with my friends and acquaintances,	0.79
	In general, my knowledge of Home loans is good	0.85
	Compared with experts in Home loans, my knowledge of Home loans is better	0.8
	The information search I have performed on Home loans is very thorough	0.78
	I consider myself knowledgeable about Home loans	0.84
	I don’t have much experience in purchasing Home loans. (Reverse scaled)	0.81
Mortgage process satisfaction (Critchfield et al., 2019) (Composite reliability 0.92, Cronbach’s alpha 0.9)	Overall, How satisfied are you with the Home Loan Bank/HFC you used	0.85
	Overall, How satisfied are you with the Application process	0.84
	Overall, How satisfied are you with the Documentation process required for the loan	0.83
	Overall, How satisfied are you with the Timeliness of the service	0.82
	Overall, How satisfied are you with the Loan Disbursal process	0.85
Purchase intention (D’Souza et al., 2021) (Composite reliability 0.92, Cronbach’s alpha 0.89)	I think the Home loan is worth buying from the Bank I chose	0.84
	I am willing to buy the Home Loan from the same Bank again	0.89
	I intend to buy a Home loan again from the same Bank	0.88
	I will always buy home loans from the same Bank	0.86
	If I am going to buy a Home Loan I would consider buying from the same Bank	0.79
	I would definitely purchase the Home Loan from the same Bank	0.81

Table 3. Convergent validity- Fornell Larcker Table

Construct	Perceived Risk	Involvement	Knowledge	Product Complexity	Perceived Search Benefits	Internet Sources	Satisfaction	Purchase intention
Perceived Risk	0.7
Involvement	0.01	0.72
Knowledge	0.02	0.32	0.66
Product Complexity	0.26	6.19e-05	0.01	0.88
Perceived Search Benefits	0.03	0.0	0.02	0.05	0.66
Internet Sources	0.01	4.95e-06	0.01	0.01	0.0
Satisfaction	0.01	0.0	0.01	0.0	0.0	9.08e-05	0.71
Purchase intention	0.0	0.0	0.01	0.0	0.02	0.0	0.55	0.65

Squared correlations; AVE in the diagonal.

Table 4. Discriminant validity—bootstrapped HTMT values

Construct	Perceived Risk	Involvement	Knowledge	Product Complexity	Perceived Search Benefits	Internet Sources	Satisfaction	Purchase intention
Perceived Risk
Involvement	0.22
Knowledge	0.23	0.75
Product Complexity	0.65	0.11	0.21
Perceived Search Benefits	0.28	0.12	0.26	0.35
Internet Sources	0.21	0.08	0.15	0.15	0.09
Satisfaction	0.14	0.16	0.2	0.14	0.18	0.08
Purchase intention	0.12	0.15	0.2	0.12	0.26	0.11	0.88

95% bootstrap quantiles.

Table 5. Hypothesis testing

S No	Hypothesis	Path		Path Coefficients	Standard error	t-value	p-value	Results
1	H1	Complexity -> Perceived Risk	0.51	0.51	0.04	13.77	0	Supported
2	H2a	Perceived Risk -> Perceived Search Benefits	−0.17	−0.17	0.05	−3.21	0.0	Not supported
3	H2b	Perceived Risk -> Internet Sources	0.12	0.13	0.05	2.45	0.01	Supported
4	H3	Perceived Risk -> Involvement	−0.11	−0.11	0.05	−2.14	0.02	Not supported
5	H4	Perceived Search Benefits -> Internet Sources	0.04	0.04	0.04	1.04	0.15	Not supported
6	H5a	Perceived Search Benefits -> Knowledge	0.13	0.13	0.05	2.81	0.0	Supported
7	H5b	Internet Sources -> Knowledge	−0.08	−0.08	0.04	−2.36	0.01	Not Supported
8	H6	Involvement -> Knowledge	0.56	0.56	0.06	10.06	0	Supported
9	H7	Knowledge -> Satisfaction	0.1	0.1	0.05	2.18	0.01	Supported
10	H8	Satisfaction -> Purchase Intention	0.75	0.75	0.03	22.12	0	Supported

Table 6. Bootstrap test of mediation

Hypothesis	Relationship	Path Coefficient (β)	t-value	p-value	95% confidence Lower level 2.5%	95% confidence Upper level 97.5%	Results
H9a	Perceived Risk -> Perceived Search Benefits -> Knowledge	−0.02	−2.13	0.03	−0.05	−0.01	Supported
H9b	Perceived Risk -> Involvement -> Knowledge	−0.06	−2.03	0.04	−0.12	−0.0	Supported
H9c	Perceived Risk -> Internet Sources -> Knowledge	−0.0	−0.87	0.39	−0.01	0.0	Not Supported

Table A1. Summary of related studies

Theme	Study	Aim of paper	Methodology	Key Findings	Contribution of our study
Perceived Risk	van Ooijen and van Rooij (2016)		Empirical	Poor understanding of risk causes households to own risky mortgage loans	The present study examines complexity as an antecedent to risk and examines the mechanism of risk reduction.
	Fornero et al. (2011)		Empirical	Higher financial literacy allows the matching of household risk with product risk while also increasing risk diversification
	Bialowolski et al. (2022)		Empirical	Financially savvy customers understand risk-reward mechanisms better
Consumer empowerment Theory	Hu and Krishen (2019)		Empirical	Studied the role of information overload on satisfaction and moderating role of involvement and knowledge and invites research in high-risk decisions such as mortgage	This study seeks to examine the role of involvement in reducing risk.
	Denegri‐Knott et al. (2006)		Conceptual	Higher consumer involvement leads to higher satisfaction when customers feel empowered
Uncertainty reduction theory	Flavián et al. (2016)		Empirical	Information obtained from the internet and offline searches reduces customer uncertainty	This study demonstrates the role of information search in reducing perceived risk
	Santos and Gonçalves (2019)		Empirical	Consumers use online and offline sources for both information search as well as uncertainty reduction.
	Lin et al. (2021)		Empirical	Perceived risk mediates between customer traits and website revisit intention
Information Search	Dawes et al. (2009)		Empirical	79% of bank customers are not actively engaged in information search	This study examines the role of objective information search and perceived search benefits in risk reduction
	Fornero et al. (2011)		Empirical	Higher financial knowledge reduced delays in payments and increased search behavior.
Satisfaction	Reddy and Thanigan (2022)		Empirical	Financial satisfaction is influenced by customer’s subjective knowledge of mortgage product	The present study examines knowledge as an antecedent to satisfaction and satisfaction as an antecedent to purchase intention
	Xiao and Porto (2017)		Empirical	Higher levels of financial knowledge and capabilities lead customers to higher levels of satisfaction

Table A2. Descriptive statistics

Indicator	Minimum	Maximum	Mean	Variance
Perceived Risk 1	1	5	2.41	1.21
Perceived Risk 2	1	5	2.42	1.13
Perceived Risk 3	1	5	2.41	1.18
Perceived Risk 4	1	5	2.35	1.10
Perceived Risk 5	1	5	2.38	1.05
Involvement 1	1	5	3.93	0.87
Involvement 2	1	5	4.01	0.89
Involvement 3	1	5	3.97	0.83
Knowledge 1	1	5	3.83	0.87
Knowledge 2	1	5	3.94	0.86
Knowledge 3	1	5	3.90	0.93
Knowledge 4	1	5	3.91	0.95
Knowledge 5	1	5	3.93	0.86
Knowledge 6	1	5	3.80	0.90
Complexity 1	1	5	2.59	1.16
Complexity 2	1	5	2.57	1.17
Perceived Search Benefits1	1	5	3.89	0.85
Perceived Search Benefits 2	1	5	3.97	0.86
Perceived Search Benefits 3	1	5	3.79	0.82
Perceived Search Benefits 4	1	5	3.98	0.84
Internetsites	1	11	3.61	5.12
Purchase intention 1	1	5	4.01	0.91
Purchase intention 2	1	5	3.93	0.95
Purchase intention 3	1	5	3.92	0.83
Purchase intention 4	1	5	3.93	0.88
Purchase intention 5	1	5	3.92	0.86
Purchase intention 6	1	5	3.87	0.94
Satisfaction 1	1	5	3.88	0.83
Satisfaction 2	1	5	3.93	0.83
Satisfaction 3	1	5	3.92	0.87
Satisfaction 4	1	5	3.93	0.84
Satisfaction 5	1	5	3.95	0.82

Figure A1. Summary of the Research Methodology

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