Danish bank is the first to introduce a negative mortgage rate in the world »GoGetNews News

Denmark's third largest bank, Jyske Bank is the first to introduce a negative mortgage rate in the world.

A rate of -0.5% is offered for ten-year loans. The bank was also the first in the country to announce the introduction of negative deposits on deposits.

A negative mortgage rate suggests that the bank pays customers for taking a loan. So, although they will have to make monthly payments on the loan, each time their debt will be reduced by an amount greater than the amount that they contribute, explained bank economist Mikkel Hög.

Negative deposit rates are possible under individual agreements for deposits in excess of DKK 7.5 million ($ 1.1 million). By default, from December 1, this rate will be -0.6%.

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The Central Bank of Denmark in 2012 set the base interest rate below zero, now it is minus 0.65% per annum. Jyske Bank explained that they can enter the market and raise funds from institutional investors at a negative rate, so they can transfer such an offer to their customers.

Another Danish bank, Nordea, announced that it will soon begin issuing loans for 20 years at 0%, as well as mortgage loans for 30 years at a rate of 0.5%.

In Switzerland, UBS has declared wealthy customers that it will introduce a rate of 0.6% per annum for deposits on deposits of more than 500 thousand euros. UBS and Credit also announced plans to introduce a negative deposit rate for wealthiest customers.

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