Mortgages were short-term, usually for three to five years, and they were not amortized. In other words, people paid interest, but did not repay the sum they had borrowed {the principal} until the end of the loan's term, so that they ended up facing a balloon-sized final payment. The average difference {spread} between mortgage rates and high-grade corporate bond yields was about two percentage points during the 1920s, compared with about half a per cent {50 basis points} in the past twenty years.
( Niall Ferguson )
[ The Ascent of Money: A ]
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