How though does that affect mortgage rates? The Huffington Post reports that in Switzerland and Denmark some lenders are paying interest to those with adjustable rate mortgages. It’s a scary prospect; lenders paying money to those who owe them money.
The article points out that in order for Canadian lenders to be in a similar position it would mean the BoC cutting interest rates to minus 2 per cent, which is of course highly unlikely.
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There has been a lot of talk in financial circles about the proliferation of negative interest rates as central banks in a number of regions including Japan and the EU, take the drastic action to stimulate their economies. There have even been suggestions that Canada could end up cutting interest rates below zero.