The Ultimate Hedge Against Inflation

Here are some stats on the benefits of home ownership. For example, let’s say you have a $500,000 30-year mortgage with an 8% interest rate. Your monthly payment would be approximately $3,700 a month. Making one extra payment of $3,700 a year would cut your mortgage by 7 years and save you up to $220,000 in interest.

Some people make their payments every two weeks, and that’s how they get the extra payment a year. If you have a larger mortgage balance than 500,000, the payment is bigger but the savings will be too. This is just one way you can create more equity in your home.

Another interesting fact is that owning a home is a hedge against inflation. For example, here’s the purchasing power of $10,000 over time.

            1964: $10,000

            1984: $3,072

            2004: $1,663

            2024: $1,002

That same 10,000 down on a 100,000 property in 1963 over time

            1964: $100,000

            1984: $323,163

            2004: $600,249

            2024: $1,029,289

That’s a million-dollar difference!

So not only is your home a great hedge against inflation, but you can also increase equity by paying an extra principal and reducing the life of your loan.

Give me a call if you’d like to learn what your next real estate steps should be.

The real estate market inside scoop for the community you love. See homes that are for sale and have recently sold. Find out if home sales in your neighbourhood are trending up or down. See what homes around you are currently selling for.