Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    19
    ReputationRep:
    How would a negetative interest rate work with a mortgage? Don't really get it.*
    Offline

    19
    ReputationRep:
    (Original post by Simonthegreat)
    How would a negetative interest rate work with a mortgage? Don't really get it.*
    It wouldnt, you'll still pay interest.
    • Thread Starter
    Offline

    19
    ReputationRep:
    (Original post by Reue)
    It wouldnt, you'll still pay interest.


    So how will they calculate that then ? So confusing. **
    Offline

    19
    ReputationRep:
    (Original post by Simonthegreat)
    So how will they calculate that then ? So confusing. **
    If your mortgage is fixed rate then you'll pay whatever the fixed rate is.

    If your mortgage is variable then it will track the bank's set rate which won't drop below 0. Basically they're never gonna pay you to take a mortgage
    Offline

    15
    ReputationRep:
    (Original post by Simonthegreat)
    So how will they calculate that then ? So confusing. **
    If they did give you a negative interest rate you'd end up receiving money for borrowing the original amount. Doubt the banks would ever offer this negative rate though, as they probably differ from the rates offered in a current account.
    • Thread Starter
    Offline

    19
    ReputationRep:
    (Original post by aliman65)
    If they did give you a negative interest rate you'd end up receiving money for borrowing the original amount. Doubt the banks would ever offer this negative rate though, as they probably differ from the rates offered in a current account.

    Is it possible it might be just case of paying mortgage and no interest? *
    Offline

    18
    ReputationRep:
    (Original post by Simonthegreat)
    Is it possible it might be just case of paying mortgage and no interest? *
    No, because banks need to make money.

    And by the way, it is spelt negative.
    Online

    21
    ReputationRep:
    Mortgage rates are always higher than the bank rate
    Offline

    17
    ReputationRep:
    Not always.

    If you had a base rate tracker , say x percent below base, and base rate dropped, you could have technically been paid.

    A number of years ago when I had one it came close and I phoned my bank to ask what would happen if base dropped further, they confirmed that if base less discount went negative they would need to pay me. However the deal was only 5 years, it is now long expired, and unless someone had a really long term base discount tracker, and I doubt many/any were sold/offered, I cannot in practice see it happening.

    In recent years I doubt many/any discounted base trackers have been offered and they usually tended to be three/five year deals.

    Certainly the banks' mortgage rate deals as against base rate deals will not go negative
 
 
 
Reply
Submit reply
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

Updated: September 1, 2016
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Would you like to hibernate through the winter months?
    Useful resources
    How much money do you spend a week?The ultimate guide to tax!Guide to student bank accounts

    Sponsored features:

    Web Legend

    Win a Macbook Air!

    Blog about setting up a website for a chance to win in our Web Legend competition.

    Quick link:

    Unanswered money and finance threads

    Groups associated with this forum:

    View associated groups
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.