Finance

Danish bank introduces negative rate home loan: Report

Updated : August 15, 2019 07:42 PM IST

A major Danish bank will offer home loans to borrowers at a -0.5 percent interest rate, reported The Guardian.

Borrowers will have to make a monthly repayment like before but the outstanding amount will be reduced each month by more than the borrower has paid, said Jyske Bank, the third-largest bank in Denmark.

â€œWe donâ€™t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,â€ said Jyskeâ€™s housing economist, Mikkel HÃ¸egh.

Another Danish bank, Nordea Bank Abp is also offering 20-year fixed-rate mortgages with 0 percent interest.

The Bank of Englandâ€™s base rate is 0.75 percent, and the European Central Bankâ€™s main rate is zero, in Denmark (which is not in the eurozone) the equivalent rate is -0.4 percent.

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