4 ms·
No, but you can get a ~3.5% 30 year fixed mortgage for the same reason.
by xxpor 5y ago
No, but you can get a ~3.5% 30 year fixed mortgage for the same reason.
- iso1631 5y agoAnd if the inflation hawks are right, that's a great deal - the capital you owe, and the interest you need to pay, will vanish within a couple of years and you'll still own the house. Banks clearly don't think there's much risk of long term high inflation.
- new_realist 5y agoThe bankers are not the ultimate buyers of mortgage bonds. The Fed is. So, these low interest rates are not a predictor of lack of inflation, but a reflection of policy. The government is taking this risk.
- sschueller 5y ago"The government is taking this risk" meaning the Tax payer. Which is you and me but not people like Bezos or Musk.
- xxpor 5y agoThat's not how a sovereign budget works.
- conanbatt 5y agoIf inflation goes up and ratings go up, mortgages get expensive, and then housing more unaffordable. Your debt is liquified but your house value also goes into the crapper.
- new_realist 5y agoOver 30 years, though, your salary will go up with inflation, but your fixed rate mortgage payments will not.
- conanbatt 5y agoAnd what happens to the 30% house value down at 5x leverage?