One of the reasons they are profitable is because some people use their homes as ATMs.
Put $5,000 of consumer debt on a credit card @ 20%; pay it off over 6 months and interest costs are relatively low in dollar terms.
Put $5,000 of consumer debt each year onto your mortgage @ 7% and make very little inroads on the principle as house price rises over 10 years then the banks just love it.
That sort of debt via a mortgage does not seem to have the same effect psychologically on people because the increases are relatively small and the interest rate is seen as relatively low.
Put $5,000 of consumer debt on a credit card @ 20%; pay it off over 6 months and interest costs are relatively low in dollar terms.
Put $5,000 of consumer debt each year onto your mortgage @ 7% and make very little inroads on the principle as house price rises over 10 years then the banks just love it.
That sort of debt via a mortgage does not seem to have the same effect psychologically on people because the increases are relatively small and the interest rate is seen as relatively low.
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