First Denmark, Now Belgium Is Paying People To Take Out A Mortgage

Tyler Durden's picture

Back In January of 2015, we asked "who will offer the first negative rate mortgage?"

We didn't have to wait long before Denmark's Nordea Credit unleashed this idiocy. And now two banks in Belgium have followed suit, paying instead of charging interest on mortgages to a handful of customers.

Thanks to Mario Draghi's generosity with "other generations' slavery", the negative rate mortgage is now a reality. As Het Nieuwsblad reports (via Google Translate),

Getting paid to borrow money for your house. It seems too good to be true, but for some clients of BNP Paribas and ING is not a dream but reality. The interest rate on their home loan is dropped below zero and so they get money from the bank.

 

For those who in 2012 closed a mortgage loan with a variable rate at BNP Paribas Fortis or ING are now very lucky. Due to a decline in interest rates, the interest rate on their home loan has also fallen below zero. In other words, the banks pay their customers rather than collect interest. This writes the newspaper De Tijd.

 

When a loan with fixed interest rate you pay a fixed rate for the duration of your loan. But at a variable interest rate, the interest rate can change at any time, depending on the conditions on capital markets. The rate is now so low that is below the zero interest rates for some customers.

 

The European Central Bank (ECB) lowered its deposit rate below zero, after all, and also buys bonds en masse to push market interest rates down.

Careful not cause a stampede of desperate "Belgian Dream" homebuyers (we hear apartments are cheap in Molenbeek), the banks note that it's 'limited' to some clients...

It's okay but for a limited number of customers. BNP Paribas Fortis is about "a few dozen customers" and ING also speaks of a "very limited number of contracts." Other banks do not have a customer with a negative interest rate.

And just like that, as we warned in January, what started in Denmark has spread to Belgium, and soon everywhere else in Europe, a situation has now emerged where savers who pay the bank to hold their cash courtesy of negative deposit rates, are directly funding the negative interest rate paid to those who wish to take out debt. In fact, the more debt the greater the saver-subsidized windfall.

That all this will end in blood and a lot of tears is clear to anyone but the most tenured economists, however in the meantime, we can't wait to take advantage of the humorous opportunities that Europe (and soon Japan and the US) will provide in the coming months, as spending profligacy will be directly subsidized and funded by the insolvent monetary system, while responsible behavior and well-paid labor will be punished, first with negative rates and soon thereafter: with threats, both theoretical and practical, of bodily harm.

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skinwalker's picture

I'd like to borrow a billion dollars at -1% please

Theonewhoknows's picture
Theonewhoknows (not verified) Apr 9, 2016 4:47 PM

Helicopter money ladies and gentlemen. They try to escape from debt through inflating it. Problem with this inflationary escape of debt - idea that through increased money supply (gov spending) you can have inflation bigger than your interest rates accrue on your debt - is that you are TAXING everyone with savings through destruction of money. What is more - if you could have some sort of a guarantee that whatever government spends money WILL WORK - you don't have it. If it is a failure, it is huge and I mean bigger than 2008. Now we have many examples of such risks - Auto loan bubble, student loan bubble, S&P bubble not to mention bankrupted governments that can go to war not to pay the debt... 

this is called war on cash. We see it in front of our eyes and it will be bad.  http://independenttrader.org/war-on-cash-a-piece-of-a-bigger-puzzle.html

Never One Roach's picture

Very good point TOWK and execllent link: Inflating the debt away is EXACTLY what the fed did in many prior wars at the rate of 12% post-war. Pay back in much cheaper dollars while inflating asset prices.

 

I guess as long as Barry and Congress allow foreigners -- esp Chinese, Russians and wealthy Nigerians -- to launder their loot in American RE everything this crap will continue.

InsanityIsWinning's picture

I can only say one word . . . gold

lunaticfringe's picture

Unfuckingbelievable. This can only happen when bankers are allowed to manipulate the money supply. 

 

The greatest trick ever pulled is the one where everyone becomes a debt slave and since that is all they've  ever known they are oblivious to the possibility that it doesn't have to be. The blacks had plantation owners- the rest of us have banker owners. There really is no difference.

BandGap's picture

Taken alone, yes, unbelieveable. Taken with all the shit going on these days it's right in line.

defender1be's picture

The titel and artikel is totaly wrong and misleading, i'm from belgium so i can read dutch.

This is about a small amount of existing morgages with variabel intrest rate.

Most of this type of morgages exclude the posebility for negativ rates and the contracts for all new morgages exclude this. So it is NOT possible to take out a morgage with a negitive intrest rate.

truthalwayswinsout's picture

There were negative interest rates in the Great Depression.

lunaticfringe's picture

Not true. I actually read an article the other night that said it has never happened. You find your source and I'll find mine.

FedFunnyMoney's picture

Dammit. When will Janet show us her NIRPles? I want in on this windfall.

CPL's picture

They are tucked into her socks at this point..

Sudden Debt's picture

Just you try to explain to people that this shit isn't normal and will end in tears.... nobody believes it because money actually grows on trees these days...

 

debtor of last resort's picture

Debt, gold & silver. Own some.

truthalwayswinsout's picture

Negative interest rates only happen in a depression and the asset value of debt, gold and silver will fall dramatically during a depression.

Actual cash dollars will rise in value during a depression. That is cash in your hands and no one elses.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Apr 9, 2016 5:32 PM

I did a re-fi last winter and the bank gave me a lower interest rate and paid for all of my closing costs and paid me cash at closing. If I can rinse-and-repeat I will do this every six months until my interest rate is below zero.

Hulk's picture

Now if we can make that Negative interest rate money Tax Deductable, we got a winner winner chicken dinner !!!

CHoward's picture

Hahahahaha, none of this makes any fucking sense.  I know - it's just me. 

Wile-E-Coyote's picture

The end must be near.

CPL's picture

They can do it 2 times more before it gets really painful for them.  Should take another 5-8 years if the past 100 have been any indication.  The thing is it's a perfect trap to get people to let go of their metal.  The quickest way to collect it is to make it money again and like rome make those "Cenarius" tungsten filled slugs.  Once they stamp out and foil wrap a couple while things are in circulation.  There are mints worldwide are increadibly effective at collecting any type of metal down to the year of release.  Could probably clean the place out in no time.

That's what I would do if I wanted to give the PM collectors one last shake of the ankles.

monad's picture

I once read a book about a nation that did exactly this to themselves until their Creator moved away. They wiped themselves out. The secret police in the country next door watched this and apparently they took notes...

Brokenarrow's picture

"a few dozen".....like the cronies of those running the bank. draghi's daughter, and a few other filthy corrupt scumbags.

zipit's picture

What morons not to put a floor interest rate in their loan contract.

Overflow-admin's picture

It's for a limited number of customers, AND YOU AIN'T PART OF IT.

SmittyinLA's picture

California is flying people in to take out mortgages, car loans, student loans, vote for bond debt

DriveByLurker's picture

I would go to Denmark to investigage, but I'm afraid that the cops might grab me at random from the sidewalk, drag me into an empty house, and tell me that it was a "negative foreclosure eviction".