[divbzero]

> In fact, if you can lock in a 2.xx% mortgage in a 2-5% inflationary environment then it is in real dollar terms a zero-interest loan. Before factoring in tax deductions.

This is a factor worth considering for anyone who is currently looking to buy a home. As long as you can afford the downpayment, you could lock in a fixed-rate mortgage while your earnings or other savings could grow at a higher rate. This is analogous to what some companies have done in recent years, loading up on low interest debt.

[frockington1]

I did this a month ago. 2.3% interest on a second home, refinanced the other for close to that. Assuming (big assumption) this transitory inflation doesn't go away it's stupid not to load up on debt.

If the Fed and the government are going to reward those who leverage up on risk, might as well. As '08 shows you'll even be rewarded when the crash happens

[hirvi74]

When interest rates on mortgages are lower, doesn't the prices of homes increase to compensate (like what's happening right now)?

If interest rates decrease and home prices increase vs. interest rates increase but home prices decrease, then there is a point where the two will intersect, and there are many points around the intersection where the difference between the two is fairly insignificant.

How does the common expression go -- "The house always wins?"