Final answer:
It is typically better for borrowers when mortgage interest rates are at or below inflation rates, while lenders benefit when interest rates exceed inflation rates.
Step-by-step explanation:
When considering mortgage interest rates and inflation rates over several years, determining whether it's better to be a borrower or a lender depends on the relationship between these two rates. It would generally be better to be a person borrowing money to buy a home when the mortgage interest rate is lower than or close to the inflation rate. This means that in real terms, the cost of the loan is lower, and the actual value of the money you're repaying is lessened by inflation.
Conversely, it would be better to be a bank lending money when the interest rate is higher than the inflation rate, leading to higher real earnings on the loan.