If you think the banks are greedy, that must mean you think current mortgage rates are exorbitant.
I have two comments:
1. Mortage rates are determined by supply and demand in the mortgage-backed bond markets. Banks just retail the results to individual borrowers, and sometimes compete with the mortgage-backed bond market by lending a much smaller amount of their own money. They must follow the bond markets, not the other way around.
2. If you think the rates on mortgage-backed bonds are exorbitant, then take 50% of your savings right now and buy mortgage-backed bonds. They’re available to the public, in lots of flavors, one for any taste. After you’ve done that, come back and describe in more detail how exorbitant the rates are.
I am being slightly flippant, of course, but… only slightly. If you think those ‘exorbitant’ rates aren’t high enough for you to plonk down a chunk of your hard-earned cash for them, then don’t expect others to throw away their hard-earned cash for even lower rates.
