≈80% of lending in financial markets is collateral-based

financial institutions use government bonds as collateral for short-term loans

you're using immovable property as collateral for a generally longer term-loan

Illya Gerasymchuk 2025-09-12 00:19

real estate is a great asset because banks lend ≈75% of its value

so if your property is worth $100K, you can borrow $75K against it at a low rate

the immovable property is used as collateral