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That would only be a concern Evand if property and rents didn't increase by the same amount as inflation did over the 20year period. I think you will find people very well grasp this concept. The party will stop the day only your mortgage interest rate raised in line with inflation but...

SF, it has nothing to do with banks losing out or you losing out. It simple maths that since the interest rate on the loan is tied to the constant fixed sum of money you borrow the magic of compounding doesn't happen with your repayments. Whereas, your house price, salary and rents are all...

Mate I was just highlighting the fact that interest on your loan when on variable rate even though tied to inflation it is always calculated on the constant/fixed sum of money that you borrowed. Whereas your salary, rents and property prices are all tied to inflation and are rising at...

If that was true SF, why does a property bought 10years ago with 100% loan and always on variable rate would be easy to make repayments today? Because your income and the value of the property will rise at compounded rate of (inflation + couple of points) whereas the loan interest doesn't...