Its hard to believe a 30y fixed bond wouldn't cost a ton of money to break, depending on the point you sell it. Imagine a 30y yielding 3% with new loans yieldi

Its hard to believe a 30y fixed bond wouldn't cost a ton of money to break, depending on the point you sell it. Imagine a 30y yielding 3% with new loans yielding 6%. That bond would be priced at half its face value in order to make up for the yield difference - and in theory the debtor would have to pay that difference to buy it back. The only way loans like that can be cheaper is an option/insurance (which costs money) in the loan to cover that risk.