Timeline for Was this a good deal on a mortgage?
Current License: CC BY-SA 3.0
9 events
| when toggle format | what | by | license | comment | |
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| Jul 6, 2016 at 17:22 | comment | added | quid | I agree that it's all being manufactured and might not persist over the next 30 years. But, any number of things can change in 30 years, summing up total payments over 30 years isn't a meaningful number. | |
| Jul 6, 2016 at 17:19 | comment | added | Mason Wheeler | Sure, with record-low interest rates and trillions of dollars of stimulus being thrown at the markets, with the explicit goal of combating deflation. (This wouldn't have been necessary if there wasn't a very serious deflationary trend that needed combatting!) But that trend--the retirement of the largest demographic group worldwide and their subsequent reduction in economic activity--is just getting started, and central banks have already used up most of their political capital, with each new attempt to create inflation more unpopular than the last... | |
| Jul 6, 2016 at 17:13 | comment | added | quid | @MasonWheeler The current CPI shows inflation. Lower than what central banks would like to see, but still inflation. | |
| Jul 6, 2016 at 17:11 | comment | added | Mason Wheeler | @quid Again, "paying interest with future money" is only a good deal if future money inflates, which is counter to the current natural trend, a trend that is currently growing stronger, and is likely to persist over a good deal of the next 30 years. | |
| Jul 6, 2016 at 17:04 | comment | added | quid | @MasonWheeler, He gets the house and the utility of the house today and he gets to pay interest with future money. "There are a lot of forces in play over a 30 year period," hell, he could refinance in 10 and change the whole game, or maybe his neighborhood sees a boom and he sells. Getting caught up on the total number due over the life of a mortgage is a waste of energy, imo. | |
| Jul 6, 2016 at 16:04 | comment | added | Agent_L | "paying back 2x" over 30 years is not bad if you consider that consumer loans get there in just 3-5. +1 for don't get caught up on sum over the life of the loan. Subtract costs of renting a similar property. | |
| Jul 6, 2016 at 14:18 | comment | added | Mason Wheeler | Also, it's worth bearing in mind that the current economic trend, due to aging populations worldwide reaching retirement age in increasing numbers, is strongly deflationary, and that central banks throughout the world have been struggling desperately (and mostly fruitlessly) to artificially create inflation ever since 2008. This is something that's not likely to go away until the Baby Boomers start dying off. | |
| Jul 6, 2016 at 13:58 | comment | added | user27684 | Inflation and the time value of money are separate forces, and they're both a factor. Inflation is a factor, as you say, because some of the mortgage payments will be in "future dollars" rather than "2016 dollars," and future dollars won't be able to buy as much stuff. Time value of money is a separate factor based on the principle that the market generally agrees that a promise of "stuff today" is worth more than "stuff in 20 years." That's generally true even if it's the same amount of stuff, so inflation can't account for that difference. | |
| Jul 6, 2016 at 1:13 | history | answered | quid | CC BY-SA 3.0 |