Like Tree3Likes
  • 3 Post By nivantj

Negative Mortgage Rate

Reply
  1. #1

    Join Date
    Jul 2004
    Posts
    3,341

    Negative Mortgage Rate

    Welcome to the new upside down world...

    Denmark's Jyske Bank offers a minus 0.5% interest mortgage while still making a profit. Customers must make monthly principal payments, but the sum they owe is whittled down month by month by the negative rate over the life of the mortgage. The bank is able to fund the mortgage by selling a bond at minus 0.5%, passing the rate to the customer, and making money on modest mortgage fees.
    https://economictimes.indiatimes.com...w/74140860.cms
    shri, jrkob and hullexile like this.

  2. #2

    Join Date
    Dec 2002
    Location
    ???
    Posts
    29,861

    Mortgage backed negative interest bonds?

    What can go wrong?!?


  3. #3

    Join Date
    Oct 2016
    Posts
    188

    I had a colleague in the U.K. back in the 2000s who ended up with a negative rate mortgage - he had a discount tracker that was something like 1% below BoE base rate....then the base rate dropped to 0.5%.

    Mortgage company paid off a little bit of capital every month! They also kept phoning him on an almost weekly basis to offer him new “deals” to get him to switch!