I’m not discussing the current prices / market etc. Was just wondering why mortgage rates are so low, when compared with such as credit cards that can go upto 20 odd % interest.
2 Comment(s)
A mortgage is supposedly a secured debt. The bank can theoretically get their money back even if the borrower fails to pay their debt. Credit cards are unsecured debt and banks frequently get stuck holding the bag. So they charge much more. Clearly there’s a big penalty for not keeping up one’s payments.
credit cards are revolving accounts that the grantor sets the terms and these companies are greedy and they have to be because the default rate is very high and chances of them getting there money with just a pulse and a body is slim and they never know who is opening them up and a lot of skip tracing. Mortgages on the other hand are based on market conditions with long term investments and treasury bills tied to them
A mortgage is supposedly a secured debt. The bank can theoretically get their money back even if the borrower fails to pay their debt. Credit cards are unsecured debt and banks frequently get stuck holding the bag. So they charge much more. Clearly there’s a big penalty for not keeping up one’s payments.
Brother Otter | Jun 29, 2009 | Reply
credit cards are revolving accounts that the grantor sets the terms and these companies are greedy and they have to be because the default rate is very high and chances of them getting there money with just a pulse and a body is slim and they never know who is opening them up and a lot of skip tracing. Mortgages on the other hand are based on market conditions with long term investments and treasury bills tied to them
golferwhoworks | Jun 30, 2009 | Reply