well, I'll be....
http://www.wsj.com/articles/the-upside-down-world-of-negative-interest-rates-1460643111AALBORG, Denmark— 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%.
MEET HANS PETER CHRISTENSEN AND HIS FAMILY
- Purchase price of their home in Aalborg, Denmark: 1.7 million Danish kroner ($261,000)
- Mortgage rate: -0.0562%
- Quarterly interest payment: -249 Danish kroner (-$38)
It has been nearly four years since Denmark entered the world of negative monetary policy, and borrowers and lenders alike are still trying to make sense of the upside-down world it has brought.
- Realkrdit Denmark, one of the nation’s largest home lenders, provided 758 borrowers with negative interest rates last year.
“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.
