If you are paying a fixed rate on a mortgage, is inflation then a good thing?
In: Economics
I the rate is fixed, then yes. But that’s part of the problem with inflation. It makes investing money unattractive and so nobody wants to invest or lend money.
Same with deflation. If money is gonna be worth more tomorrow, im not gonna invest or lend to today.
That’s the reason why a stable currency, regardless of nominal value, is the most desirable for economies.
Sure. We bought in 2017, refi’d in…21 or 22 I forget, and since then I’ve gotten market adjustment raises at work (to the tune of getting called in to my bosses office and just being given 10% out of nowhere). Inflation is pushing my wages up but my mortgage hasn’t moved. Damn shame we were responsible and didn’t have a crystal ball to go all in on an even bigger place. But we have enough house and my complaints are mainly cosmetic and definitely first world problems.
Kinda
It’s more accurate to say that pay rises are good for your mortgage, and pay rises tend to be at least somewhat linked to inflation
The amount of money you owe decreases, while the price of everything else (and especially the amount you owe) increases – meaning you owe less and less relative to your income
Inflation increases the value of your house, but also the property taxes you pay, thus making it cost more. Ideally you’d want your house to be worth as little as possible until the day you decide to sell.
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