Like, if you give someone a mortgage today, the land and the house have X resale price and that usually goes up with time, so selling the house later would recoup the loan and the interest on the loan, in nominal terms.

But if you give someone a mortgage under the Bitcoin standard, the land and the house might go down in price over time, so selling the house later would lead to a loss. The collateral backing the loan declines in value over the life of the loan.