Eurozone mortgage base rates turned negative in February, which might mean serious problems down the road, even if some borrowers benefit in the short-run.

12-month Euribor – the rate used to calculate most mortgage repayments in Spain – came in at -0.008% in February, the first time it has ever turned negative and uncharted water for monetary policy.

Nobody really knows what this means or where it leads, but in the short term it should mean that existing borrowers with an annually resetting mortgage (and no floor clauses) will see their mortgage payments fall by around €14 per month for a typical €120,000 loan with a 20 year term.

Ambrose Evans-Pritchard (AEP), International Business Editor editor at the Daily Telegraph, describes the situation as “grotesque”. “It’s not healthy, it’s not sustainable, it’s mad,” says José María Roldán, head of the Spanish Banking Association, quoted by AEP, who explains how negative interest rates are “devastating” for banks. He calls them a “calamitous misadventure”.

Euribor has been below 1% since June 2012, but Euro interest rates were not always so low. Back in July 2008 they peaked at 5.393%, and in the decades before Spain joined the Euro, interest rates above 10% were common.