<p>
</p>
<p>Two things: first a mortgage is a security-backed loan. If you default, they take your home to limit their loss. Try to get an unsecured loan right now. It’s around 7%. The inability to discharge a loan makes it more secure (i.e. closer to the 4% loan than the 7% loan). Your future earnings secure the loan.</p>
<p>Second, you can get a mortgage at around 4% right now if you have excellent credit. With good credit, it’s around 6 or 7%. With fair credit it’s around 8-10%. And with poor credit and you can’t get a loan. If the government forced lenders to set the same rate for everyone and the lenders were not allowed to turn anyone down, they’d probably set a rate close to 7%. People with good credit would subsidize people with poor credit.</p>