Here's a bank with negative mortgage rates — it’s in Denmark
In fact, they’re now negative. Denmark’s Jyske Bank JYSKY, -20.24%, is now offering a 10-year fixed-rate mortgage at negative 0.5%. Additionally, Finland-based Nordea Bank announced Wednesday that it will offer a 20-year fixed-rate mortgage in Denmark that charges no interest, and the bank is preparing for the possibility of home loans up to 30 years in duration having negative rates. Currently, the rates on 30-year fixed mortgages average just 0.5% in Denmark.
In the U.S., the situation is much different. Right now, the 30-year fixed-rate mortgage in the U.S. averages 3.6%. Nevertheless, the specter of a recession has some worrying about the trajectory of the interest rates in the U.S. and what negative rates could mean for Americans.What would happen if interest rates turned negative in the U.S. It would become harder — or, at least, expensive — to save money.
A boom in refinances would also likely occur, as has happened in the U.S. every time mortgage rates have dropped to record lows, Fratantoni said. “It would take a lot of big changes for the U.S. to have negative interest rates,” said Kate Warne, investment strategist and principal at Edward Jones. ‘I don’t expect any negative in rates in the US any time soon, but even if or when we do...it will probably take a few years before we see the possibility of negative mortgage rates.’ —Danielle Hale, chief economist at Realtor.com “That’s an enormous headwind on economic growth,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association, a trade group that represents the home-loan industry. “That keeps interest rates extraordinarily low.
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