This is one of the main reasons I bought a house this year. Low interest rates combined with high inflation and leverage mean buying real estate is one of the best things you can do with your money right now.
So you sold the bank a bond with an inflated par value, figuring interest rates will rise soon (lowering the bond value) and snatched a good deal. Except the banks are almost certainly better at predicting the future interest rates, and they demand a coupon rate significantly higher than the risk-free rate to compensate.
The short of it is that the banks aren't stupid; the potential for a future interest rate hike is priced in.
The exception is if the banks are selling on their mortgage bonds to someone else-- then they don't care if they're paying too much for them, and they'd be happy with the additional demand.
Isn't that how the 2008 Global Financial Crisis happened...?
https://www.investopedia.com/articles/pf/07/secondary_mortga...