What should house slaves do if they encounter inflation during the loan repayment period? In fact, the first thing that comes to mind is not property buyers, but major banks. But if there is serious inflation, it is a good thing that the mortgage family really disappears.

Problems caused by severe inflation

Serious inflation will bring many practical problems, such as soaring prices, currency devaluation, enterprise closure, people's unemployment, serious shortage of food and medicine, economic contraction, enterprise closure and rampant violence.

In order to control inflation, the state will tighten fiscal policy and reduce the total social money supply, usually by raising the deposit reserve and raising the deposit and loan interest rates.

In recent years, the Fed's interest rate hike and contraction also have objective factors to control inflation. This means that in order to maintain the stability of the currency, the central bank must raise interest rates substantially.

So, what should mortgage borrowers do when they encounter inflation?

For mortgage buyers, on the one hand, it is more difficult than ever to bear repayment, on the other hand, it has to bear the huge depreciation of real estate. Whether to continue to repay the loan or abandon the property to banks and insurance companies in breach of contract will be a dilemma.

How to make a decision depends on the remaining repayment period. If the remaining loan repayment period is still long, the down payment and the repaid loan are lower than the property depreciation.

For example, the down payment plus the paid part of 500 thousand, and now buying the same property is 600 thousand cheaper than the original property, you should consider giving up. Instead, you should continue to hold it and repay the loan slowly.

It is worth noting that under the premise of ensuring cash flow, if the loan balance is still 10-20 years, don't pay it back in advance. Because mortgage is the only wool that ordinary people can get from the country.

Of course, if the loan balance is only a few years, then it is best to repay the loan in advance, realize the house, and then pay the down payment to make a mortgage with a larger amount and a longer time.

I said that serious inflation is not necessarily a good thing for mortgage borrowers. If you can't even guarantee a basic life, you can't survive. Will you still have a mortgage?