During an inflation your salary is likely going up, and so are all other assets that you own or buy. Let's say you owe 100000 EUR for a 200000 EUR house, pay 2

During an inflation your salary is likely going up, and so are all other assets that you own or buy. Let's say you owe 100000 EUR for a 200000 EUR house, pay 2% interest, inflation rate of 10%. Your net worth is 100000 EUR in the first year. If you repay 8000 EUR, the next year you owe 92000+2%*92000=93840 EUR and your net worth is 220000-93840= 126160 EUR. If you repay 4000 EUR and invest 4000 EUR in gold, next year you owe 100000-4000+2%*96000=97920 EUR, your gold is worth 4400 EUR after inflation and your net worth 220000-97920+4400=126480 EUR. Plus you have improved liquidity. If the inflation rate is higher than the interest of your loan, it's often better to invest in inflation-proof assets.