The basis of this textbook view is that, if the former is higher than the latter, there is an arbitrage opportunity, which will be exploited by a bank lending dollars raised in the short-term money market to takers in the FX swap market, until the opportunity is arbitraged away.
However, in comparison to households that only hold owneroccupier debt, there is evidence that investors tend to accumulate higher savings in the form of other assets (such as paying ahead of schedule on a loan for their own home, as well as accumulating equities, bank accounts and other financial instruments).13 Refinancing Another option for borrowers is to negotiate an extension to their interest-only period with their 9 / 13  BIS central bankers' speeches  current lender or refinance their interest-only loan with a different lender.