Illya Gerasymchuk
Entrepreneur / Engineer
so by using real estate as collateral you're just tapping into the existing low interest liquidity/credit line at the same time the property earns a yield (e.g. via rents) and generally appreciates
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