Is the crisis coming? The bank provides a loan with a negative interest rate

Is the crisis coming? The bank provides a loan with a negative interest rate

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Many investors fear financial collapse in the near future Some banks are ready to lend money with negative interest rates to curb losses from the expected financial crisis, Denmark’s Jyske Bank, the third largest in the country last week, reported that her clients would now be able to take a 10-year fixed rate mortgage of -0.5%, meaning that their clients would pay back less than the money they received from the bank.

In other words, if you bought a $ 1 million loan and paid off your mortgage in 10 years, you would only pay back $ 995,000 to the bank, BusinessInsider reports. But keep in mind that even with a negative interest rate, banks often charge fees associated with the lending process – so customers can still pay more than they borrowed.

The Jyska Bank offer is another mortgage proposal with extremely low-interest rates (in this case even negative ones) given by homeowners in Denmark. Nordea Bank, Scandinavia’s largest lender, will offer a 20-year mortgage with 0% interest, The Local reports, and Bloomberg notes that some Danish lenders offer a 30-year mortgage at a rate of 0.5%.

It may seem illogical for banks to lend at such low-interest rates, but there is an explanation for this. Financial markets are now in a volatile and uncertain position. Risk factors are the ongoing trade war between the US and China, Brexit and the slowdown in global economic growth, especially in Europe.

Many investors fear financial collapse in the near future. As a result, some banks are willing to lend money with negative interest rates, taking smaller losses than they would risk losing if they provided higher interest rate loans that customers would not be able to repay.

Is the crisis coming? The bank provides a loan with a negative interest rate

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