Aren’t banks trying to make money like every other business? If ROI on mortgages is only 2.5%, but market investments are 7%+, why do banks lend out mortgages at all? Is it a low risk thing? How do banks decide how much of their portfolio goes toward lending out mortgages?
In: Economics
> If ROI on mortgages is only 2.5%, but market investments are 7%
Average historical ROI is only one component of several that must be considered when making an investment. Also important are tax efficiency and risk.
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