If your mortgaged house depreciates while you are still paying off the mortgage, you still need to pay the original, un-depreciated amount. You'll also probably need to pay interest accumulated during the time the property was mortgaged, which means you can't use it to avoid inflation.

What lender do you know of who will voluntarily reduce your mortgage obligation if the property depreciates?

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carlosjobim 6 days ago | parent [-]

> If your mortgaged house depreciates while you are still paying off the mortgage, you still need to pay the original, un-depreciated amount.

Mistake in logic. The money you received as a loan doesn't depreciate in value if the underlying asset depreciates in value. And vice versa.

As for interest, if your real estate has appreciated by a factor of 9 as in the example we're discussing, then interest rates are of minor concern to get the jackpot payout. As you certainly know, you wouldn't have to take out a loan corresponding to the entire value of your asset, and neither would most banks give it.

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seabass-labrax 6 days ago | parent [-]

OK, 9x the value of your property as liquid wealth is nice, but you'll still need to pay it back eventually, won't you?

	▲	carlosjobim 5 days ago \| parent [-]
		After you've paid it back, you still own the property which is 9x the value, or maybe more. So you can cash out instantly, without having to move out. And you get to pay it back in 30 or 50 years time. By that time, the money is worth half or less than half than what it is today. And your interest is much less than inflation. And you can deduct the interest from your taxes.