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I'll buy a home with cash. Never with debt. Mortgages are pointless. I'd rather pay my rent to a landlord than a bank.

• ericb 16y ago
  Mortgages are an excellent inflation hedge. Consider it--you borrow a large pool of dollars to buy the home. The value of the dollar drops through the floor. Now you are paying back the loan which was for a fixed amount and doesn't change with dollars worth half as much.
  • ootachi 16y ago
    But surely the interest makes up for this. It wouldn't make financial sense for the lender otherwise; why lend money to homeowners if it won't beat inflation than, say, invest it in the stock market?
    • ericb 16y ago
      In the US, the interest is tax deductible, so if you have earnings to match against that, the effective interest rate to the buyer is only 2/3rds of the nominal rate on the mortgage.
      • ultrasaurus 16y ago
        So then wouldn't the buy/rent decision depend on your income tax rate?
    • rhettg 16y ago
      If recent history of the mortgage market tells us anything, it's that lenders are not too concerned with making financial sense.
  • mrschwabe 16y ago
    Sure, if your timing is perfect. This isn't 1975 though. Who knows what's going to happen.