A graph plotting the real value of a mortgage payment over time when the inflation rate is positive and the mortgage is a standard nominal-rate loan illustrates the

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The mortgage-tilt problem refers to the phenomenon where the real value of fixed nominal mortgage payments decreases over time in an environment of positive inflation. This is because the purchasing power of the money used to make the payments declines, making the payments effectively less expensive in real terms as time goes on.

A Graph Plotting the Real Value of a Mortgage Payment