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A comment on Things I wish I’d known about CSS. Parent comment

Re:Things I wish I’d known about CSS by LandR on Friday July 17, 2020 @03:59PM (#23874813)
My down payment was £70k, interest rate is 2.14%

When I renew at end of year it shoul be around 1.1%

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Re:Things I wish I’d known about CSS by balfirevic on Friday July 17, 2020 @04:30PM (#23875153)
Well damn, I don't think there is anything below 3.00% (3.50% more common) where I live.

That's nominal - 3.5% - 4.0% is the effective interest rate. I don't know much about mortgages, so not sure if I'm missing something. Congrats on your place - it looks great!

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Re:Things I wish I’d known about CSS by dahfizz on Friday July 17, 2020 @07:53PM (#23877448)
Is that right? I think inflation makes the effective interest rate lower than the nominal rate.

You could imagine that inflation pays ~1% of your mortgage for you because each dollar that you owe is becoming less and less valuable.

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Re:Things I wish I’d known about CSS by balfirevic on Friday July 17, 2020 @08:04PM (#23877538)
Effective interest rate is, to my understanding, not related to inflation. It's just a way to make loans with various compounding periods easily comparable (I'm mostly citing this from Wikipedia, I'm far from expert here: https://en.wikipedia.org/wiki/Effective_interest_rate )

I just mentioned it for the sake of providing more information to whomever was reading my comment.

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Re:Things I wish I’d known about CSS by dahfizz on Friday July 17, 2020 @09:15PM (#23878042)
You're right, I confused effective and real rates.

https://www.investopedia.com/articles/investing/082113/under...

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