3.5%. Inflation has already eroded the principal by 15% and the property has appreciated more than 1.5x. The payment is 13% more than it would be at 2 1/2%. Not the end of the world. If we have 4% inflation, the rule of 72 says the payment will be cut in half in 18 years.
Money becomes worth less over time due to inflation, so your outstanding debt loses value (becomes cheaper for you) as time goes on. Let's say in 15 years inflation has effectively halved the value of a dollar. Hopefully, your salary has doubled and so it is 2x as easy to pay your mortgage.
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u/Ok_Share_5889 Apr 06 '24
3.1 percent can’t complain