Could negative mortgage rates really happen?

  • Negative rates could happen only to adjustable-rate loans.
  • Here the structure of our ARMs makes negative payments impossible because of a near-hit experience back in 2004.
  • Every mortgage contract began to identify a rate “floor.” In mortgages the typical language has been “... in no case lower than the margin amount.” You’ll find all new HELOC documents in the last dozen years have explicit rate floors.

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Don’t get your hopes up. But, you’ve got clients asking, and the national news media is hopelessly lost on the subject, including the financial press. First things first. Negative rates could happen only to adjustable-rate loans. Fixed-rate loans are…fixed rate.