

The issue isn’t about ownership, per se. It’s about acquisition of principle value which you carry with you when you sell the house.
The example halfway down the post of a $400K loan fixed at 6% is a good example: A 15-year loan would have a $3,375.74 monthly payment but pay off $305,364 principle after 12 years. A 30-year would have a $2,398.20 monthly payment, but have only $134,978 paid off. A 50-year has a $2,063.74 payment only pays off $66,251 principle.
This is why it’s a particularly bad debt trap. The 15 or 30-year mortgage allows the homeowner to move and have acquired significant principle value, which makes the costs of moving much lower.
And the monthly payment in substance are costlier when you add “interest” (rent into a black hole) and lower “principle” (long-term loan to the bank which is repaid back at sale). When the house is sold, the principle value returns to the seller via the sale and remaining loan payoff. So when you are paying off, say, $1,000 a month, if $600 is principle and $400 is interest, your true (final, after-the-sale-returns-principle-to-you) payment is $400. If you lower the total to $900 a month, but it breaks down as $400 principle and $500 interest, the true payment is $500.
So again, debt trap.




I think it’s the gag from From from this post.