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If it is possible for banks to pay negative interest rates for savings, is it also possible that banks will use negative interest rates for mortgages too?
It would be awesome to get money from the bank which holds my mortgage instead of having to pay interest. Is this a realistic possibility?
Swiss banks currently pay out little or no interest to investors because the Swiss National Bank (SNB) charges banks negative interest for all deposits they hold at the SNB. In other words, banks pay money to the SNB just to hold money in Swiss francs.
So the SNB's negative interest rates pose a huge expense for banks, rather than a source of extra income. Banks make up for this loss by raising fees and charges and paying out lower interest rates to investors.
Although the overall low interest environment has led to low mortgage rates, it is very unlikely that any bank will offer mortgages with no interest - much less negative interest rates - because mortgages are one of the few low-risk investments which still provide decent returns.
More on this topic:
Negative interest rates: How they affect you
