How bad is a mortgage?

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woody's picture
woody
Status: Member (Offline)
Joined: Sep 13 2008
Posts: 14
How bad is a mortgage?

Hi All,

I was wondering, presuming hyperinflation is there to come, how bad would it be to have a mortgage with long-term fixed rate interest rate (say 5 %)? In my opinion your mortgage will become "cheaper", and you better invest your assets in gold etc. After the hyperinflation strikes you pay back the mortgage with the goldinvestments.

Woody.

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gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 537
Re: How bad is a mortgage?

That is sort of an ideal way to go.

Caveat that you can afford to make the payments ( ie keep your job ) while you wait for the day where 1 days wage can clear that pesky mortgage.......

Brainless's picture
Brainless
Status: Silver Member (Offline)
Joined: Dec 9 2008
Posts: 150
Re: How bad is a mortgage?

Don't forget about the 1000% interest rates you would have to pay. Better have some money in gold to enable to pay off that debt in one swoop.

How much you need for that is dependend on the amount of your mortgage and how much inflation will happen. Or in short, buy what you can spare and hope for the best.

 

gyrogearloose's picture
gyrogearloose
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 537
Re: How bad is a mortgage?

His point was about a long term FIXED interest rate, even if inflation hits 1000% you are still locked at 5%

Of course banks might have some fine print burried to get out of the deal...... since they are on the loosing side ;-)

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: How bad is a mortgage?

I wouldn't borrow more money though just in anticipation of hyperinflation.  Debt is certain; hyperinflation is not.  No one knows when it will happen for sure; might be a long time, might not.  And even if it does, the rules might be changed to your disadvantage.

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