If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
For the mortgage specifically, and if you have a fixed rate mortgage, yes. For everything else, no.
When I purchased my house it was valued at $225k. I put down $25k and mortgaged the rest. So for the next 30 years, I’m paying off that $200k based off the payment schedule the bank created when they issued me the loan. That never changes assuming I don’t refinance.
My property tax and insurance are NOT subject to those same terms. As housing prices went up, so did my taxes and insurance. I’m now paying roughly an extra $500 a month than I did 3 years ago when I bought.
So I’m in a better spot than if I bought today, hell I wouldn’t be able to afford the house I’m in if I tried to buy today, but I’m not ENTIRELY protected from inflation related expenses.
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