Hello, Mike Bird here, co-host of Money Talks, our weekly podcast on markets, the economy and business.

Welcome to Editor's Picks. We've chosen an article from the latest edition of The Economist, which we very much hope you'll enjoy.

The holiday from reality for the happy few enjoying it has been delightful. Three years ago,

it was still possible to fix a mortgage rate in Britain and much of the euro area at somewhere

near 1%. American housing loans were dearer by just a percentage point or two. Even as interest

rates have risen and borrowing costs for new mortgages have doubled or tripled, homeowners who

locked in the enviable rates of the early 2020s

have been living blissfully in the past. Moreover, the inflation that prompted rates to rise

has bitten chunks out of the real value of their debt. Alas, the holiday is now over for many. Although American fixed rates often last

for decades, most in Britain and swathes of continental Europe expire after five years or less.

It was in early 2022 that the last of the dirt cheap loans disappeared, after which borrowing costs

began climbing fast. A large number of mortgage holders, in other words, have either seen their

interest bills rocket recently or will do soon. For those with spare cash to hand,

a question that seemed remote a few years ago is suddenly a great deal more pressing.

Should they repay the debt early?

To many who owed money during the 1980s, when interest rates soared into the double digits, the answer is an obvious yes.

At the time, borrowing costs became so elevated that merely meeting them, let alone repaying any capital in addition, was a constant

struggle. The risk of that being repeated is simply not worth taking. Better than to pay all debt off at the earliest opportunity,

while doing so is still possible. Even if rates stay where they are at present, that will save

money on future interest bills. Those whose experience was shaped by more recent decades

might feel rather differently.

Interest rates have spent most of that time on a downward trend, culminating in the ultra-loose

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