Annually in Russia there is a certain level of inflation. It is associated with the gradual rise in price of goods, an increase in expenses and an increase in income. Inflation is an integral element of commodity-money relations that accompanies the business and guarantees its stability. How inflation is reflected in ordinary citizens? As a rule, it stimulates purchasing activity. The fact is that it becomes unprofitable to save money, since they are constantly depreciated. Therefore, people begin to buy more. Buying depends on the income level: household appliances, clothes, cars. Many people prefer to invest in real estate, using all kinds of loans. Inflation and mortgage are profitable components for many borrowers. After all, with the depreciation of money, their loan is gradually depreciated.
This method of investment is much more profitable than the creation of accumulative deposits in bank accounts. However, it should be understood that this is the benefit of the future. By investing in real estate using a mortgage, the borrower cannot count on instantaneous benefits. It will be implemented only after a few years.
But what about ordinary borrowers?
But many make a mortgage not only for the purpose of investment, but also to improve housing conditions. How inflation affects their condition? In most cases, inflation will be beneficial and it. Indeed, with rising prices, the income of borrowers is growing. And at the same time, the amount of the loan does not increase, but only decreases. If the borrower issued a loan with fixed payments, then after 10 years he will pay a mortgage exactly as much as he paid at the very beginning of the loan. Moreover, its standard of living will change a lot. Thus, inflation is beneficial to the borrower.
In order for a mortgage to become a profitable enterprise, several conditions must be met:
Draw up a loan for a period of at least 10 years.
Take a loan in the currency in which you get income. It is best in rubles, since it is the ruble in the long run that is depreciated by more other currencies.
When applying for a loan, insist on fixed mortgage payments.
If you be able to predict when there is another jump in inflation and to arrange a mortgage on the eve of it, then the benefit from it will be obvious in a couple of years. Indeed, against the backdrop of the depreciation of money, the cost of housing increases significantly. In Russia, most of the mortgage loans are drawn up precisely according to a fixed scheme, while in the countries of Europe percentage rates are floating, therefore, payments are changing within a period. But in fairness, it should be noted that the currency in Europe is more stable.
Inflation and mortgage: what a connection?
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