Consumers’ acceptance intention towards interest-free home financing: decomposition approach of TPB model

Abstract

Purpose This paper aims to determine factors that contribute to consumers’ intention to opt for interest-free home financing or mortgage adapting decomposition approach of the theory of planned behaviour (TPB) model. Design/methodology/approach For this study, judgemental and purposive sampling was used and over 300 respondents who are using or willing to use equity-based Islamic mortgages were selected for analysis. Findings According to the findings of this study, consumers’ intention towards the interest-free mortgage is influenced primarily by their attitude, subjective norm and perceived behavioural control but also by the additional construct of their innovativeness of consumers as well as decomposed variables such as perceived relative advantage and perceived compatibility, but most importantly, peers. Overall, the study’s findings show that the suggested model clarifies a better knowledge of the factors that influence consumers’ choices to accept interest-free mortgage financing. Research limitations/implications Considering this research to be limited in terms of coverage geographically and the theory rendered the context should be given proper attention when interpreting future outcomes. Furthermore, future researchers can extend the direct relationship by using attitude as a mediator and also test adding a moderating variable when conducting a cross-sectional study. Originality/value This work is mainly focused on consumers’ intention to use Islamic mortgages. Current research incorporates and validates consumer innovativeness and introduces decomposed variables, namely, peers, perceived relative advantage and perceived compatibility to the TPB model. To the best of the authors’ knowledge, the decomposition of variables with the main predictors in the setting of an interest-free mortgage in Pakistan, the decomposition approach of the TPB model has not yet been attempted.