this is why a 7 day Treasury bill-backed repo agreement may have 2% haircut and a 0.1% spread, while a 20 year immovable property collateralized loan a 25% haircut and a 2% spread the T-bill is more liquid, less volatile and the loan term is much shorter

Illya Gerasymchuk 2025-09-13 14:12

collateralized lending comes with smaller interest rates/financing cost because it's low risk for the lender if you default - the lender keeps your collateral haircuts and spread are set sufficiently high to cover liquidity, term and market risks