You have to take into account all time periods from the time the interest rate charges started (beginning of loan) through to the time when the bank's loan is t

You have to take into account all time periods from the time the interest rate charges started (beginning of loan) through to the time when the bank's loan is terminated. They may have (potentially) had a few month's worth of being underwater but they were able to borrow at a lower rate also. Further, there are several %age points of spread between what banks pay to borrow and what the mortgage rate is, further cushioning them. See the CIDOR here: http://www.tradingeconomics.com/canada/interbank-rate http://www.tradingeconomics.com/canada/interbank-rate ... now compare with the mortgage rates a bank will charge. EDIT: CIDOR under 1% but ratehub.ca says the best 5-year fixed rate you can get is... 2.42% .