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Nominal interest rate (which is the rate quoted on your loan) cannot go negative. So your actual amortized payments for acquiring a home will never be subsidize
by acchow 6y ago
Nominal interest rate (which is the rate quoted on your loan) cannot go negative. So your actual amortized payments for acquiring a home will never be subsidized by a "negative" mortgage APR.
- reducesuffering 6y agoAny reasoning you want to give on this? Negative nominal interest rates already exist in European countries as a counterexample.
- acchow 6y agoFor a consumer to borrow funds the nominal rate is negative? Where have you seen this? I'd like to see a citation. The reason this rate cannot be negative is that demand will immediately fill it up and use it for arbitrage (shove the money under a mattress and pay back the loan later) before it can become negative.