> In other words, inflation means what you're paying back to the bank is worth less and less as the time goes on.
Well yes, that's exactly my point. The $1 you pay back to the bank 25 years ago is worth MORE than the 1$ you paid yesterday. But you still only need to pay back a fixed $300k.
Obviously agree that interest paid is where the bank charges you for the loan, but your original point about inflation meaning your actually paying back the inflation adjusted value of the loan makes no sense.
Eh? This is totally backwards. The amount you owe is fixed, e.g. 300k. Inflation means that that 300k is worth less and less as time goes on. Therefore, inflation is a good thing for debtors!!!
Well yes, that's exactly my point. The $1 you pay back to the bank 25 years ago is worth MORE than the 1$ you paid yesterday. But you still only need to pay back a fixed $300k.
Obviously agree that interest paid is where the bank charges you for the loan, but your original point about inflation meaning your actually paying back the inflation adjusted value of the loan makes no sense.