Why are some banks at risk for having large portfolios of low interest rate mortgages?
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Most banks sell loans to someone else so they can make more loans. As a bank there’s a limit to how much money you can loan based on how much money is deposited. Low interest loans aren’t attractive for investors to buy, because they can get a better return on higher interest loans for the same price. Banks are then stuck having to sell the loans at a discount which loses them money, or keep the loans and not be able to make as many new loans.
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