Negative Interest Rate Mortgages

With some of the Eurozone falling into negative interest rate territory we keep hearing about how savers will have to pay the banks for them to keep their money safe. But what about borrowers? How do negative interest rates affect exisiting borrowings? Normally there would be a 'zero' floor policy in place but it turns out that some of the euro banks never even factored the possibility of negative rates and are now in a position where they have to pay borrowers for the money they lent them.

Yes, an interest free mortgage and the bank pays a part of your borrowed principle every month! Interesting and strange times indeed. A lot more in this article:
"The problem is just one of many challenges caused by interest rates falling below zero, known as a negative interest rate. All over Europe, banks are being compelled to rebuild computer programs, update legal documents and redo spreadsheets to account for negative rates.

Portugal?s central bank recently ruled that banks would have to pay interest on existing loans if Euribor plus any additional spread falls below zero. The central bank, however, said lenders are free to take ?precautionary measures? in future contracts. More than 90% of the 2.3 million mortgages outstanding in Portugal have variable rates linked to Euribor."
European owner occupied rate like these are not like our bank lending. These are regulated rates. And the interbank rate is negative not for homes. Swiss etc have has what appears super low rates for years but its not quite as made out. Try to buy Swiss real estate !! Try to borrow for investment purposes and its a whole different set of rates. for owner-occupied.

Its a form of social policy to keep (non-wealthy) foreigners out. In Australia such policies would get front page "racist" headlines.