Two Sides to Mortgages with Negative Interest Rates

Upon examination of these negative interest rates, things might not be so black and white once all of the bank charges and fees have been added. Jyske Bank itself emphasized that this type of mortgage is not intended to finance an entire property. But the fact of the matter is that interest rates on loans continue to decline, even in the Czech Republic. If the surrounding markets will follow the worldwide trend of zero or sub-zero interest rates, the Czech National Bank (the local regulator) will have a hard time resisting them. And as interest rates decrease, real estate prices are likely to increase.

But there are two sides to every coin, and this is true for negative interest rates as well. As mortgage interest rates go down, banks will increasingly demand better collateral, which will have a negative impact on demand. This development in capital markets indicates that well-secured home loans with negative interest rates are gradually becoming a safe investment.