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Not surprisingly, this phenomenon has already occurred in Europe and Japan.
It is reported that in August 2019, the Swiss Bank promised to charge an annual fee for deposits of more than 500000 yuan, as well as interest on deposits.
Negative interest rates frequently swipe the screen, but it seems to be just a number game between the central bank and commercial banks, and many netizens think it has nothing to do with ordinary people.
In fact, no, money in hand, purchasing power continues to depreciate, put in the bank, negative interest rate not only, there is no interest, but also may be charged management fees. In order to avoid risk, funds will find ways to invest with high yield.
In August of the same year, Denmark’s third largest bank launched its first negative interest rate mortgage loan, with a mortgage interest rate of-0.5%.
The professional explanation of this discount home purchase loan refers to a special bank loan used for the purpose of buying a house and subsidized by the state or bank for its interest payment. it is a kind of preferential loan to encourage local people to buy property.
This means that the lender borrows money from the bank to buy a house without paying interest to the bank. on the contrary, the bank helps you repay the loan together, and on the whole, the amount of money paid back is less than that borrowed.
In the impression of the Chinese people, negative interest rates are inconceivable, but at present, 1/3 of the world’s bonds are negative interest rate bonds.
Countries such as Germany, France, the Netherlands, Switzerland and Japan have negative maturity yields on 10-year bonds; countries with negative deposit rates include Sweden (- 1%), Switzerland (- 0.32%), Hungary (- 0.15%), euro zone (- 0.4%) and so on.
This time, due to the huge impact of the epidemic on the world economy, countries have to adopt loose monetary and fiscal policies, and the rate of return on fixed income investment drops again and again.
So, if the Bank of Canada cuts interest rates further or even below zero, the cost of borrowing will continue to fall, which will further boost the current hot housing market, boost the enthusiasm of home buyers, and house prices will be further pushed up.
And McClaren said the Bank of Canada will not stop rising house prices, which is a matter for Ottawa.
At present, the benchmark record of the Bank of Canada is 0.25%, which is already the lowest in history. Driven by favorable interest rates, it has led to a strong rise in house prices in recent months.