In the 1920s, mortgages were typically structured as short-term loans ranging from three to five years, lacking an amortization feature. Borrowers would pay only the interest during the loan period without repaying the principal amount until the end, which resulted in a significant final lump-sum payment, often referred to as a balloon payment. This financial arrangement left many borrowers with substantial debts that they would need to address at the term's conclusion.

During this era, the spread between mortgage rates and high-grade corporate bond yields averaged about two percentage points. In contrast, over the last two decades, this spread has narrowed to roughly half a percent. This significant change reflects shifts in the financial landscape, influencing how loans are structured and the overall cost of borrowing for consumers in more recent times.