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22 sats \ 14 replies \ @Undisciplined 18 Sep \ on: Anddddd With the Cut 2% Inflation Goal is Dead econ
Sayonara mortgage payments. It was nice knowing you.
Can you elaborate on this?
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Inflation reduces the real value of fiat denominated debts. I've got a big ass mortgage that's about to evaporate.
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I don't know. It's not an adjustable rate mortgage, so the savings will be entirely through inflation. Let's say we have 3.5% inflation going forward. That would be more than a 10% reduction in the real value of the mortgage, every three years.
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Sure, but it's a 30 year mortgage, so it'll still be there in five years. Plus, we might be in a new inflation paradigm. The last four years had almost 30% cumulative inflation.
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No, long term you are absolutely right, just thought you are maybe saying your goodbyes too soon:) I had a mortgage in a country with 15% YoY official inflation and I think 30-40% YoY unofficial inflation. The problem is you don't get salary increase every year. So I really started feeling the difference on the 5th year or so, when salary finally caught up.
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just thought you are maybe saying your goodbyes too soon
I'm definitely jumping the gun, but that's reasonable because my time preference is incredibly low.
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We sorta did. It was the tail end of the historically low interest rates and we knew inflation was coming.
Is your mortgage interest rate fixed for 30 years?
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Yes
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Sweet
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