Because they aren't really low risk. There's two different kinds of risk being referenced here. Risk 1: High chance of default. This is the risk you take by le

Because they aren't really low risk. There's two different kinds of risk being referenced here. Risk 1: High chance of default. This is the risk you take by lending to borrowers with poor credit. Risk 2: Low chance of default, but when defaults happen you take a big hit. These are jumbo loans. Banks recognize that Risk 2 has inherent costs that require a higher interest rate. My previous wording of "More profit with less risk" was false. More profit with less Risk 1, but that's because you're taking on Risk 2.