It’s time to look more favorably on your mortgage. The jump in interest rates in the last two years means that an old fixed rate loan should be thought of as one of your most valuable assets, rather than a deadweight loss that you have to pay off to the bank every month.
The idea that money you owe someone else is an asset is hard to get over. And sure enough, you still have the money. But apply the logic used in the market, and more than $1 trillion in wealth has been transferred from banks and bondholders to borrowers because rates have risen – a gain in wealth on were widely ignored by the beneficiaries.
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