Inflation is painful, but is there a silver lining?

There is no way around it right now. The cost of owning homes and investments is genuinely challenging, particularly for those carrying larger mortgages. And if we are being frank, there is a high chance conditions become slightly harder again in 2026 before they improve. Higher rates tighten cashflow, increase anxiety, and make even well planned home purchase decisions feel deeply uncomfortable.

But there is a longer-term dynamic that often gets lost in the pain of servicing a large mortgage. When a homebuyer takes out a loan, the debt itself is fixed in nominal terms. One million dollars is one million dollars. What is not fixed are incomes, rents, business profits, and overall wealth. Over time, those tend to grow. This matters not just at the household level, but also at the city level and, even more so, at the suburb level where you own. That distinction between the size of a mortgage and its future burden is critical.

So the more useful question is not whether a one-, two-, or three-million-dollar mortgage feels big today, but whether that same mortgage represents the same burden over time. Is a two-million-dollar mortgage taken on three years ago really the same as taking one on today? Will a three-million-dollar mortgage in 2026 feel the same in 2027 or in 2030? In real terms, the answer is likely no.

Over the long term, inflation erodes the real value of debt. During periods of higher inflation, that erosion often occurs faster, provided incomes eventually catch up. This is historically why many people who felt stretched in the early years of ownership later found their mortgage far more manageable, even without aggressive repayments. Time, inflation, and income growth quietly change the equation, particularly in locations where gentrification, rising wages, and higher entry prices shape the buyer of the future.

This does not mean inflation is good, especially in the short term. High rates hurt and cashflow pressure is real. But when you take a longer term view, and if inflation settles back into a more normal range, interest rates become more manageable and incomes continue to grow, today’s large mortgage often becomes tomorrow’s smaller problem in real terms for those who managed to hold on.

This is one of the reasons property has been such a powerful long-term wealth builder, beyond the fundamentals that drive price growth. You are effectively repaying yesterday’s dollars with tomorrow’s income. That dynamic does not eliminate risk, but it does explain why patience has historically been rewarded, even for those who focused more on holding than aggressively paying down debt.

The key is survivability. Structuring your loan well enough to get through the tough years without panic decisions matters far more than predicting the perfect rate cycle. Staying in the market through periods of higher inflation often does more of the heavy lifting than people expect.

That is not blind optimism, and it is not blind bias. It is maths, history, and a reminder that patience matters during the storm. Rather than asking whether your mortgage is too big today, it may be more useful to ask whether it will still feel big once inflation, income growth, interest rates, and time have had their say.

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