Banks grow fat on “lean” interest rates

How lenders are profiting the most from historically low note interest rates.

The worst of times are the best of times for lenders

Mortgage lenders are profiting greatly from low interest rates, according to data recently released by the Mortgage Bankers Association (MBA).

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While homebuyers are enjoying historically low note rates, lenders are the primary beneficiaries. The note rateThe interest rate agreed to between the homebuyer and the lender on the promissory note. Contrast with real interest rateThe nominal interest rate minus the rate of inflationThe price changes over time in consumer goods and services, quantified in the consumer price index (CPI).. The real interest rate includes a margin of profit if the nominal rate is higher than the par rate.. is also known as the nominal interest rateThe interest rate agreed to between the homebuyer and the lender on the promissory note. Contrast with real interest rateThe nominal interest rate minus the rate of inflationThe price changes over time in consumer goods and services, quantified in the consumer price index (CPI).. The real interest rate includes a margin of profit if the nominal rate is higher than the par rate.., the rate written on the homebuyer’s promissory note and at which the homebuyer agrees to repay the lender. Though the note rateThe interest rate agreed to between the homebuyer and the lender on the promissory note. Contrast with real interest rateThe nominal interest rate minus the rate of inflationThe price changes over time in consumer goods and services, quantified in the consumer price index (CPI).. The real interest rate includes a margin of profit if the nominal rate is higher than the par rate.. is very low, real interest rates are very high.