Strange question!

kriss_boy

Is there anyway to factor in how inflation effects your mortgage? Ie to estimate what sort of property you will be able to afford in the future.

At present we pay £600 per month on an 80K mortgage, although this summer we intend to up the overpayments to nearer 1K per month. This means while the rate stays low we will be paying off about 900£ per month which is awesome.

Obviously though as you get older and further into the term of your mortgage then the payments themselves lower. Even 5 years into the future we will have had our wages increase by 3% most years and worked our way up our scales (we both work for local governemnt/NHS ).

The reason I ask is Im trying to sus out where we will stand in the future. Id like to hope that we will have the eqivalent of a nice detached 300K, 3 or 4 bed house in 10/15 years time.

But you look at your current mortgage and it doesnt seem possible!! I suppose its the relationship between your wage and house prices that dictates that...

Dan_1976

Yes, its an interesting not stupid question.

I would say that its the other way around. When you factor mortgage rates into inflation it can make a difference.

What I would say, is if you borrow 100k over 25 years and fix it for say 10 years or more, if inflation is steady at say 2% for that period then your mortgage will cost you less in the future!

Obviously inflation does not effect what you owe, its makes what your owe seem more or less.

Its about balance and not taking on more than you can afford now and look at what if rates go up by 2-4% not just 1-2%