[16] At the same time, in the absence of new operations, TLTROs no longer have a direct accommodative contribution to the marginal funding costs of banks. The increase in market rates is transmitted via bank funding costs to bank lending rates on new loans (the interest rate channel) as well as via repricing of the existing stock of flexible-rate debt.
The interaction between these two factors is also relevant: a monetary expansion is doubly beneficial for people who purchased their homes with a mortgage, because it brings an appreciation of the value of the house and a decrease in the real cost of debt servicing.