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2016-04-15 — wsj.com
Hans Peter Christensen got some unusual news when he opened his most recent mortgage statement. His quarterly interest payment was negative 249 Danish kroner.
Instead of paying interest on the loan he got a decade ago to buy a house in this northern Denmark city, his bank paid him the equivalent of $38 in interest for the quarter. As of Dec. 31, his mortgage rate, excluding fees, stood at negative 0.0562%. ... "My parents said I should frame it, to prove to coming generations that this ever happened," said Mr. Christensen, a 35-year-old financial consultant, about his bank statement. Denmark isn't the only place where central bankers are experimenting with negative rates. The European Central Bank and the Bank of Japan, grappling with stagnant economies, are using subzero rates to stimulate growth. Switzerland and Sweden, like Denmark, are trying negative rates to keep their currencies in line with the struggling euro. ... Authorities in both countries are concerned that low rates have caused households to gorge on loans that they won't be able to repay if rates increase or real-estate values fall. "It's dangerous," Riksbank governor Stefan Ingves said in an interview. "Our households are borrowing way, way too much. It must be reversed sooner than later." Mr. Christensen, the financial consultant, bought his home outside Aalborg for 1.7 million Danish kroner ($261,000) in 2005, then renegotiated his mortgage several times after rates dropped. His interest rate first dipped below zero last summer. Because of various mortgage fees, he still pays a modest amount each quarter in addition to his principal payment. source article | permalink | discuss | subscribe by: | RSS | email Comments: Be the first to add a comment add a comment | go to forum thread Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately. |