If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
If it takes 500 candy bars to buy a house today and 1000 candy bars to buy a house in ten years you still only owe 500 candy bars total if you buy today meaning you could spend those other 500 candy bars on toys. Since you are paying a fixed amount on the mortgage it is a good thing for the mortgage. What a lot of people are running into is that taxes are based upon how many candy bars it’s worth that year so that math is done off of the 1000 candy bar value even if you only have 100 candy bars left to pay on the house. The house insurance is also based upon how many candy bars they have to give you if the home is destroyed so that cost goes up as well.
500 candy bars is still a lot of candy bars and not everyone can afford a house on their allowance.
Latest Answers