Below Zero: The SNB is one of five central banks with negative rates.

Switzerland’s experiment with negative interest rates is beginning to take hold in the mortgage market, with some local lenders saying they’re effectively paying people to borrow money.

At minus 0.75%, Switzerland’s policy benchmark rate is the lowest of any G-10 central bank, and yields on the country’s 10-year bonds have been below zero since late last year.

Yet while borrowing costs for homeowners have dropped, evidence suggests that so far mortgage rates stayed positive, as banks sought to pass the Swiss National Bank’s charge on overnight deposits on to their clients. For a select few, though, it seems the cheap money drive is getting through.

“In individual cases, we grant short-term loans with zero or negative interest rates to institutional clients for financing with corresponding collateral,” Zuger Kantonalbank spokeswoman Carmen Wyss said.

The topic of negative interest rates come to the fore again as central banks prepare to turn back on the stimulus taps. Banks have long complained about them, and UBS Group AG Chief Executive Officer Sergio Ermotti warned Tuesday that fresh easing could stoke asset bubbles.

Newspaper Tages-Anzeiger, which was first to report the negative-rate loans, quoted a spokesman for the Grisons cantonal bank as saying they were sometimes granted to institutional borrowers whose financing needs were both large and short-term.