> Why would anyone loan out trillions ... The same money in an index fund produces 7% over the long term the originator of these mortgage loans want a consiste

> Why would anyone loan out trillions ... The same money in an index fund produces 7% over the long term the originator of these mortgage loans want a consistent income from the interest payments, even if it's lower than buying equities. These equities that earn a theoretical 7% is only good in the long run, such as 10-20 years. It might not return anything in particular years, or negative returns in others. If you needed a fixed income stream (eg., an insurance, or an annuities provider like pension funds), you will not want to bet it all on equities. Mortgages, which are collateralized, means you have a buffer for losses if the defaults do happen.