# Zero Interest Rates?



## Starbuck (10 Nov 2008)

There's talk of Rates dropping to ZERO as happened in Japan.

Question: What happens with Interest Only Loans if the Interest Rate is Zero??


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## joejoe (10 Nov 2008)

Starbuck said:


> There's talk of Rates dropping to ZERO as happened in Japan.
> 
> Question: What happens with Interest Only Loans if the Interest Rate is Zero??



It wont be free money, the banks will still take their cut.

Joejoe


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## VOR (10 Nov 2008)

Exactly. You pay the margin.


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## Starbuck (10 Nov 2008)

Ah yes, gotcha.


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## St. Bernard (10 Nov 2008)

Is it possible for say the ECB to have a zero interest rate.


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## mercman (10 Nov 2008)

Chance would be fine thing. Interest rates have dropped a full 1% in the recent past. However 3 month money is 4.47% today, 1 month money is 4.57% today and even 3 year money is 3.68 %. I wonder who is milking it now ???


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