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Message Subject What happens to mortgages during hyperinflation?
Poster Handle Kodiak Island
Post Content
With all the talk and rumors of a coming worldwide economic carsh lately, was wondering this:

Let's say you buy a house in calm economic times. You put half down, get a 30 year mortgage, and pay $1000/mo at 6%.

Then hyperinflation hits. A cup of coffee costs $1 million, like in Venezuela and Zimbabwe.

What happens to your mortgage? (assuming the banks are still standing) Do you pay it off with your pocket change? Or is there a catch?

(I recently read mortgage papers, 15 pages of it, and don't see any clause about money becoming worthless. But then again, I'm not a lawyer either)

Thanks in advance for your input.
 Quoting: Sikhed


As long as you chose a fixed rate (not variable) you pay your entire mortgage off with 3 loaves of bread.

truestory
 Quoting: WyatteSmith


Not true. The banks will always be able to change rules and law because, well, they are banks and they have all the money. The reason I know this is because I read about it happening somewhere before and the banks did indeed change the rules so they didn't get screwed. The banks will never lose! So, no, I don't think you will just be able to pay it off in inflated dollars, at least not all of it. Perhaps at the beginning of hyperinflation you might, until the banks get around to changing their mortegage rules.
 
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