[quote=svelte]Why does anyone think this is a good deal?

The fixed rate is zero and remains that way for the life of the bond.

Therefore, the rate of the bond is twice the semi-annual inflation rate, ie it is the rate of inflation. And that is calculated twice a year.

In other words, your money is just staying pace with the rate of inflation!

You’re not making money – you’re just breaking even![/quote]

Well, perhaps I agree with you. Except, the way I look at it, money going into this bucket of my investment wasn’t really my money… It was the bank’s money from the cash out refinance at 3%…

So if this thing can keep above 3% for the next 30 years, I’m not losing money, but the banks sure are 🙂

And it won’t be the entire cash out amount. A small portion of it, to offset potential losses from taking higher risk investments elsewhere.

So in my book, overall, in the worst case scenario, hopefully I don’t end up worse off than 4% combined…lol…