Home ownership is reframed as a high-risk financial instrument, not a safe investment. A mortgage constitutes a 5-to-1 levered, highly concentrated, non-cash-flowing bet on the economic future of a single zip code, making it far riskier than a diversified public market portfolio.

Common wisdom to rapidly pay off a mortgage is suboptimal. Due to compounding, investing extra cash—even if the return rate merely matches your mortgage interest—will generate significantly more wealth over time. One investment compounds up while the other debt amortizes down, creating a large wealth gap.

A proposed 50-year mortgage, intended to improve housing affordability, is a flawed solution. The extended term means borrowers build equity at a negligible rate, making the financial outcome similar to renting and failing to deliver the key wealth-building benefit of homeownership. It's a demand-side fix for a supply-side problem.

The traditional 30-year mortgage for a primary residence is a suboptimal wealth-building tool. A more effective strategy involves securing long-term, non-callable debt to purchase productive, cash-flow generating assets, rather than tying up capital in a personal home.

While a 50-year mortgage could significantly lower monthly payments to aid affordability, it has a major drawback. The total interest paid over the life of the loan would likely be double that of a traditional 30-year mortgage. This prohibitive cost, along with technical challenges, would likely suppress borrower demand for such a product.

The gap between existing mortgage rates (under 4.25%) and new rates (over 6.25%) is over 200 basis points. This spread, which disincentivizes homeowners from selling, has persisted for three consecutive years. Historically, the gap only exceeded 100 basis points for a total of eight quarters over the past four decades, making the current situation a major anomaly.

A mortgage is a revolutionary abstract concept. It allows you to create a narrative about your financial viability thirty years into the future and, based on that story, borrow from that imagined future to acquire a real asset in the present. It turns time into a tradable commodity.

In the initial years of a mortgage, the vast majority of payments go toward interest, not the principal loan balance. For a $500,000 home, you might pay over $133,000 in interest after five years but only reduce your principal by $26,000, making short-term ownership and flipping unprofitable.

Extending mortgage terms doesn't solve housing affordability because it primarily boosts demand for a fixed supply of homes. This drives asset prices higher, as sellers adjust prices to match buyers' new monthly payment capacity. The historical example of Japan's housing bubble, fueled by 100-year mortgages, illustrates this danger.