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> The banks now will get very little interest on those mortgages Banks make relative profit on rates. Lower rates usually means the relative profit increases.

• Ericson2314 5y ago
  > Banks make relative profit on rates. True > Lower rates usually means the relative profit increases. The spread increases? Not necessarily. > Then, because as rates fall and prices increase, the volume of mortgages increases. Because housing prices go up in response to lower rates, I am not sure that is the case. You can almost think of the total payment being the same, and adjusting the principle/interest ratio. I think large exurban tracks are how they try to boost volume. > As long as rates fall, banks win. Doesn't follow from the rest. Homeowners---whoever can afford it, typically do well relative non-homeowners who really get screwed over here. Homeownership in general is bad, in that other ways of doing housing would result in better land use and growth, but this is because low density is loose-loose, not because banks make more money that way.