Impact of inflation on mortgage
Please can someone help me on this:
Bernie and Hilary have just married and currently live in a rent-free community in exchange for doing community chores and house repairs. They now plan to buy their own home and start a family. They aim to buy a two-bedroom flat in their local area. They have found out that flats such as these are currently on the market for £160,000. The general inflation rate is 2% a year but property-price inflation in their area is 6% a year. Both of these rates are expected to stay the same on average for the foreseeable future. The couple are confident they will be able to get a fixed interest-rate mortgage.
Explain the impact of inflation on their mortgage.