2 ms·

You’re forgetting about inflation here. Sure you’re paying 300k of interest for a 400k house at 5%, but your mortgage payement keeps decreasing in real terms.

• PretzelPirate 4y ago
  Do you benefit from inflation if your income or other investments don’t go up in value? Someone owning a house and making $300k/year loses purchasing power at the same rate as their mortgage “value” drops due to inflation.
  • TimPC 4y ago
    You'd have to be in a pretty crappy situation to not have your income go up over a 25-year mortgage.
    • rnk 4y ago
      Same goes somewhat for home prices going up, but if you don't live in a booming tech city it might not hold true. I'm in one, my house is 4x in under 20 years. My payment was so huge when I got it, now it isn't so crazy.
  • ar_lan 4y ago
    The country would be in shambles if, over a 30 year horizon, your investments did not outpace that interest rate. There's a reason why the <3% interest rate era we just left was considered free money - especially entering into an 8% inflation USA.