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Today's rate of inflation means very little to a 30-year mortgage. The rate of inflation 5, 10, 15+ years from now is what matters. But if you think inflation
by dragontamer 4y ago
Today's rate of inflation means very little to a 30-year mortgage.
The rate of inflation 5, 10, 15+ years from now is what matters.
But if you think inflation really will be that high for so long, I got some TIPS to sell you...
- mucle6 4y agoBut can't people refinance? Is the bank offering lower % interest that is subsidized by people who don't refinance?
- bombcar 4y agoThe mortgage rate is basically set by whoever is buying the bonds they are packaged as. So it floats a certain points higher than treasuries, usually.
- dragontamer 4y agoI have a 2.3% mortgage. Do you think I'm going to refinance today? No. The bank is stuck with 2.3% from me for the next 15 years. Its a bad deal for them, and a great deal for me. As long as interest rates go up, there's no refinancing to occur. Its financially the wrong move for the property owners.
- bombcar 4y agoIt's not even a bad deal for the bank, they sold your mortgage to a bond long ago and collect some fees.
- sarchertech 4y agoFees mean that the bank will still making money if you refinance in the very short term. Inflation isn’t likely to stay 8% for long.