The latest news from the world of falling interest rates: A bank in Denmark is offering borrowers mortgages at a negative interest rate. It's effectively paying its customers to borrow money for a house purchase.
Jyske Bank, Denmark's third-largest bank, said this week that customers would now be able to take out a 10-year fixed-rate mortgage with an interest rate of minus 0.5 percent, meaning customers will pay back less than the amount they borrowed. If you bought a house for $1 million and paid off your mortgage in full in 10 years, you would pay the bank back only $995,000.
Financial markets are in a volatile, uncertain spot right now, particularly in Europe. As such, some banks are willing to lend money at negative rates, accepting a small loss rather than risking a bigger loss by lending money at higher rates that customers cannot meet.
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