Why is there a 4 point spread between the 30 year mortgage rate and the Fed rate of 0%? Historically the spread was 2%.
I think accounts for two things: (1) higher risk of default, and (2) market based interest rates for collateralized debts. Since more and more mortgages have become collateralized into mortgage bonds over time, they have to generate interest rates similar to other bonds in order to get investors to buy them.