In the presence of inflation-driven high interest rates, mortgage repayment in real terms is no longer level, but instead starts high and ends low, shutting off many would-be-borrowers. This problem is referred to as:

Question

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The tilt problem refers to the issue where, in the context of high inflation and interest rates, the real cost of mortgage repayments is not evenly distributed over time. Initially, payments are relatively more expensive, which can deter potential borrowers. This is because the nominal interest rates do not adjust for inflation over the life of the loan, making the real interest rate effectively decrease over time as inflation diminishes the value of money.

In the Presence of Inflation-Driven High Interest Rates, Mortgage Repayment