Here’s one reason that buying a home now can help you hedge against inflation.
The 30-year fixed mortgage.
Your fixed-rate mortgage expense stays the same for the life of the loan, despite what happens to the dollar’s value. You pay back the loan in yesterday’s dollars, not tomorrow’s. Look at inflation compared to the interest rate of the mortgage. Many experts argue that the mortgage interest you pay over the term of a 30-year fixed mortgage is less than the expense of paying for the same property in cash with today’s dollars because of inflation. When the inflation rate is higher than the interest rate on your mortgage, your equity will continue to outrun the expense of that mortgage.
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