[BizarroLand]

Is it just me or is a prepayment risk effectively moot for large loan investment companies like banks?

After all, even though their calculations were counting on the profits of that money, having it back now means they can loan it out again, and possibly will receive a lager return if interest rates have risen.

For instance, my mortgage is at 2.49%. Right now interest rates are at 3.04%, so if I paid my mortgage off today the bank should be able to find a borrower who would pay over 20% more for the same money, right?

I get that this could go in the opposite direction, though, so I know it's not a perfect answer.