This is a bit of a subjective question and relates primarily to the UK market
There are a number of banks who are lending at BOE + 1.49% (ie: 1.99 %) whilst at the same time accepting deposits paying 2.75%
Granted the 2.75 is a bonus rate but I just cannot understand how writing these kind of mortgages are beneficial froma a banks perspective
EDIT: The terms were in fact on a two year fix with the ability to refinance tpo another provider. The answer to this question was in fact that the bank is able to artifically create moiney by fractional reserve banking and is further able to source funds from the BoE direct.