Inflation and Mortgage Payments

Some of you young ones should be aware of this.

Inflation is usually cured--in part--by an increase in interest rates.  That causes spending to slow down as people pay more for credit, thus having less for other 'stuff.'

A $300K 30-year mortgage at 3% produces a payment of $1,257/month plus property tax.

The same principal and term at 4.5%, however, requires $1,520/month plus property tax.

That's $260/month you won't be spending on 'stuff.'

See?