The "prime-BA spread" is simply prime rate minus the 30-day bankers’ acceptance yield.
In raw terms, it represents gross lender margins on variable-rate mortgages.
From this spread, lenders have to pay liquidity/risk premiums (when raising lending capital in the credit markets), customer acquisition costs, overhead, salaries, etc. The remainder is profit.
Join our mailing list to receive the latest news and updates as they happen. Unsubscribe any time.