The Era of Very Low Inflation and Interest Rates May Be Near an End

Re:The Era of Very Low Inflation and Interest Rates May Be N... by Retric on Thursday April 26, 2018 @04:20PM (#16935302)

It also made the idea of a starter home more meaningful. Your monthly payments quickly became meaningless especially if you got any kind of a promotion.

At 5% inflation if you pay 1000$/month in year 0 it feels like 614$ / month in year 10 and 377$ / month in year 20.

At 1-2% inflation the loss of the interest tax deduction over time as you pay more principle and less interest means home lone feels about as expensive in year 0 and year 20.

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Re:The Era of Very Low Inflation and Interest Rates May Be N... by shostack on Thursday April 26, 2018 @11:31PM (#16938271)

Right, but isn't the distinction that you are paying principle, which in essence buying equity? It isn't free cash flow, but there's a big difference between putting money towards principle and paying a bank interest.

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Re:The Era of Very Low Inflation and Interest Rates May Be N... by Retric on Friday April 27, 2018 @11:13AM (#16941363)

I am not saying it's reasonable or unreasonable for home interest to be tax free. Just that the difference impacts your disposable income.

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