[throwaway2037]

    > In the US, this is normally offset by the fact that the government tries to make mortgage rates very close to the Fed rate

I assume you are talking about Fannie Mae, Freddie Mac, and Ginnie Mae. To me, there true purpose is the allow US home loans to be predominantly fixed rate. That is exceptionally rare in the world. In most countries, it is hard to get a fixed rate for longer than 10 years. In the US, 30 year fixed is normal. Part of the magic is unwritten gov't guarantees and clear rules that allow commercial banks to sell risky (fixed rate) loans to them. Mind you: This isn't free. It requires expert level interest rate risk management by those big three orgs. As we saw during 2008 GFC, they failed.