If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
I bought in 1983 at the bottom of the recession where inflation was 8-10% and a 1 year mortgage was 15%.
5 years later with inflation my wage had increased 40%, so my perceived debt owing on the house had reduced by 40%. The first few years where 17 dollars per month came off the principal and the rest 750 dollars was interest were not fun as I had the feeling of treading water in the deep ocean.
Lots of people got upside down on their homes as property values crashed with high interest rates as they owed more money than their homes were worth on the market. Smart people held on and people that went under ended up with debt after selling their homes.
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