Depends on the size of the loan, but what you say is true for most. In my personal case I have a “jumbo” loan which is not covered by US government Freddie Mac rules so the bank has to hold the loan on its books. This is pretty common in the Bay Area due to the stupid level cost of housing. In my area the median housing price is $1.785M. From a US tax perspective it made sense for me to take out the largest loan, $1M, because of the interest tax deductions. That, charity and capital loss is pretty much the only tax deductions I have. Not complaining as I understand how lucky I am.